The unprecedented job loss and economic disruption caused by the coronavirus pandemic has left many observers concluding that a united government might be better equipped to provide the critical fiscal support a bitterly partisan Congress cannot.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

\u201cInvestors are left to wonder if the election will deliver a White House and Congress intent and able to get something or done, or willing to risk a nascent recovery petering out,\u201d said James McCann, senior economist at Aberdeen Standard Investments.<\/p>\n

\u201cWith both houses of Congress and the White House controlled by Democrats, any spending measures would meet very little resistance,\u201d said Keith Buchanan, portfolio manager at Globalt Investments.<\/p>\n

On Tuesday, Fed Chair Powell addressed the need for more fiscal stimulus for American families and small businesses in more forceful terms than he has used previously, saying the fallout of failure to do so in short order could be \u201ctragic.\u201d<\/p>\n

In a new research note, Goldman Sachs analysts predicted a bullish 5.8 percent GDP growth for 2021 \u2014 but said it would be higher still if Democrats swept both chambers of Congress and the White House. \u201cA blue wave would likely prompt us to upgrade our forecasts,\u201d they said, because expected fiscal stimulus and investments in infrastructure, climate, health care and education would, in effect, cancel out the economic hit of higher taxes on big corporations and the rich.<\/p>\n

\u201cA hallmark of the Trump administration was rolling back regulations and decreasing corporate taxes, and people would argue that has, in fact, promoted growth,\u201d said Dan North, senior economist at Euler Hermes North America. \u201cObviously, the Democratic argument is corporations should pay their fair share of taxes and regulations, particularly environmental regulations, need to be enhanced.\u201d<\/p>\n

North predicted that a Joe Biden administration backed by Democratic majorities in the House and the Senate would reverse the GOP tax cuts and either reinstate or strengthen regulations. Analyst estimates differ on the economic impact these changes would have over the long term, market observers say a much more immediate risk faced by Wall Street and Main Street alike is the teetering economic stability of a growing number of families and small businesses.<\/p>\n

\u201cWithout a fifth stimulus coming in quick fashion, there\u2019s some real pain coming to the parts of the economy that directly affect consumers,\u201d Buchanan said.<\/p>\n

With consumer spending the biggest driver of economic activity, experts say preserving, supplementing or replacing household income is paramount. \u201cIf you look at the macro data in terms of income, income has totally dropped off and now you\u2019ve got people facing utility shutoffs [and] increasing incidents of hunger,\u201d North said.<\/p>\n

\u201cAs the virus lingers on, as economic damage lingers on\u2026 it\u2019s really hard to put parameters around how much worse it can get,\u201d Buchanan said.<\/p>\n

If a gridlocked Congress can\u2019t deliver more spending relief, \u201cIt\u2019s hard to imagine a vibrant growth economy coming back to the U.S. anytime soon,\u201d Buchanan added.<\/p>\n<\/div>\n