Before James Carville created “It’s the economy, Stupid” as a winning slogan for Bill Clinton’s campaign for president in 1992, the state of the economy had been a key factor in the outcome of numerous U.S. elections. A bad economy helped Ronald Reagan beat Jimmy Carter in the presidential election of 1980. A good economic turnaround helped Reagan win a second term. The Sub-Prime Mortgage Crisis of 2007-2008 helped Barack Obama defeat John McCain in 2008.
The last time both political parties worked together to improve the economy was in the 1990s when the Democratic Clinton Administration worked with the Republican House, led by Newt Gingrich, to create the nation’s last four balanced budgets beginning in 1997. A year earlier, Bill Clinton pronounced that “The Era of Big Government is over”.
With the U.S. national debt soaring to over $39 trillion and the annual deficit of $1.9 trillion for fiscal year 2026, none of the five administrations since then, with four presidents, have adhered to that forecast. Even if a miracle of all miracles were to occur with Democrats joining with Republicans to balance the federal budget, the magnitude of this massive debt is so great that a balanced U.S. budget would require major restructuring of federal spending priorities.
Major defense spending increases are already being called for because of prior annual defense reductions. Concurrently, militant turbulence around the planet increased, the costs of the current conflicts in Iran and Ukraine continued, and the future military requirements of these engagements were highlighted. Weapon stockpiles have been depleted, and American allies are asking for additional military support. As a result of the deficits and conflicts with other political priorities, military decisions are already likely being compromised in the Persian Gulf negotiations.
The coming midterm election voters looking for affordability relief help from the federal government are going to be greatly disappointed because the government spending $1.9 trillion more than it takes in is already a massive subsidy to the economy, which is inflationary. This puts pressure on interest rates to increase, rather than decrease, which would aid consumers with credit card debt or those hoping to purchase a new home. Compared to other nations’ currencies, pressure on the U.S. dollar, from deficit spending, increases the prices of imported goods and foreign travel.
Public welfare programs tend to be inflationary, with their high subsidies pouring into all areas of the U.S. economy. These programs tend to reduce the number of Americans available in the workforce, thereby increasing wage costs to employers and prices to consumers. Medical costs, however paid, are increased by replacing free market forces of supply and demand with fixed government pricing and subsidies. Carried to the extremes, like in the United Kingdom’s medical system, rationing, high costs, and poor services result.
Those voters looking for 2026 midterm politicians to relieve their economic anxiety with practical solutions to high costs of living, reduced inflation, housing affordability, and lower medical costs will be greatly disappointed. The Democrats will vilify the incumbent Republicans. The Republicans will accuse the Democratic Party of turning their party over to their socialists/communists like Mamdani and the Democratic Socialists of America, who would solve their government’s problems by taxing the billionaires, and any citizen they can find with a bank account or IRA!
The nation’s inflation and other problems will not be solved until our two political parties directly address the nation’s structural problems, not just their symptoms. Was it Nostradamus that forecasted these two groups would get together “when Hell freezes over”?
I am not shopping for warmer apparel until I see how the 2028 presidential election evolves and someone reminds the politicians running that year that “It’s the economy, Stupid”!
TW3
August 13, 2026
John Whitmore Jenkins
www.jenkins-speaks.com
john@jenkins-speaks.com
