With the U.S. Senate in Republican control and the House under Democratic leadership, experts are saying that a divided U.S. Congress may have a moderating effect on the economy, ensuring that politicians hew to a middle ground in adopting policy changes. Reforms are less extreme.
In addition, neither Republican nor Democratic voters are likely to be too upset by the midterm elections. Both had gains. While confidence of small business owners rose after President Trump’s election, according to a survey by the National Federation of Independent Businesses, the optimism about the economy is not likely to lag, as economic expansion, in its ninth year, is about to hit a new record for longevity.
A divided government is not necessarily bad for the economy, argues Harvard economist Alberto Alesina, ensuring a strong balance. While there may be fewer laws passed, the ones adopted will have broad bipartisan appeal.