The Republican presidential debate held on October 28 included some complicated business words.
There’s no need to be confused. You can quickly learn what the presidential candidates know about business. They are probably not the savviest people on some these topics anyway. Here’s what they mean when they are talking about business.
It’s still early in the race so the candidates’ plans for the economy are still rather vague. The major Republican candidates including Ben Carson, Donald Trump and Marco Rubio have centred their plans on lowering taxes, which, according to them, will stimulate stronger growth. The Democrats like Bernie Sanders and Hillary Clinton are more focused on the problem of income inequality. Clinton specifically has urged for increased taxes on wealthy individuals and a repression on major banks.
The United States Economy
When the candidates mention “the economy”, they are referring to a variety of things: companies, jobs, the GDP (the sum of all the products and services made in the U.S). This is not the whole truth. The “economy” is a general term which could include everything from how many homes are being sold to how much consumers are spending. The economy either dwindles or grows; if it continues to shrink then it’s a recession. Should it grow, then things are good.
The health of the economy basically refers to Americans’ financial health as well as the small companies and businesses they are employed by. A good economy indicates good homes, good jobs, financial health and good homes for the American people. A bad economy is unfairly chalked up to the president. This is unfair because there is nothing the president can individually do to fuel economic growth.
The economy is not great, but is doing well. The United States is still recovering from the 2007 financial crisis. The country’s GDP, which is used as the chief marker of the health of the economy, is predicted to grow 2.7% in 2015. It’s not much, but it’s better than a lot of other countries right now.
Wall Street
This is a general term that roughly refers to every major organization that deals with money. Wall Street used to only refer to investment banks, now it means nearly everything including banks, mutual fund companies, brokers, hedge funds and private equity firms.
Wall Street is importance because of its size. Banks are huge. The top four control approximately $9 trillion. That’s an enormous concentration of money in a handful of places, and people are concerned that another financial crisis in lurking.
Jobs
“Jobs” include the usual 9-5 gigs, part-time work, seasonal work and minimum wage work. There’s also the key question of who is getting jobs.
Jobs equal income, income equals spending, and spending keeps the economy going. Bad or few jobs will result in Americans feeling trapped, spending less and this could stall the economy.
Currently, America’s unemployment rate is at a seven-year low of 5.1%. Unfortunately, wages are not so fantastic. The average person just isn’t getting more wages. Simple supply and demand could mean that unemployment decreases and wages rise, according to economists.
Taxes
A few types of taxes keep popping up in this election:
Income taxes – paid by most American citizens
Repatriation – taxes that companies pay for the businesses that are overseas. These companies try to avoid paying U.S taxes by putting their money in overseas bank accounts.
Taxes on private investments – like houses for example. These taxes are 15% lower to encourage Americans to make long-term investments with their money.
Immigration
Fundamentally, immigration is an economic problem. The vast majority of immigrants that go to the US are quite poor. The problem is that immigrants are willing to work for lower wages, which in turn affects how much middle and lower class people get paid. There is also the argument that immigrants are leeches on resources like education and health care. Other data shows that immigrants have a positive effect on the economy, sparking growth and assisting to boost wages.
