US Election 2012: What does the result mean for the US and the World?

The results from the 2012 US Presidential Election are in and the result is exactly what many expected right from the beginning: Obama won. Some did expect Romney to pose more of a challenge, especially after his stellar performance in the first debate that saw him improve in the polls. However, for the most part, those gains didn’t continue and all things considered, it’s always seemed like it has been Obama’s election to lose. Following the New York Times 538 forecast over the past few weeks, Romney was never really a serious contender, peaking at around 40% chance of victory in the electoral college before falling steadily in the week before the election. Despite this though, the US won’t just carry on like nothing ever happened, with the results of this election having future ramifications, possibly resulting in economic stalemate and affecting the 2016 Election.

Many claimed that Obama sealed the victory due to the results of the recent jobs figures, which showed that the economy was continuing to add more jobs, or his handling of the response to Hurricane Sandy. People have compared Obama’s praise of FEMA, the agency handling the disaster relief, to Romney’s, who recently called for it be wound down. While this might have been slightly true, the end result was likely to be the same anyway, with even independent voters deciding who they would vote for before these events.

All it takes is a bit of research and it’s easy to see that Obama was always securely in the lead, at least when you look at the polls. Romney might have taken a swing state or two, but for the most part, he was facing too much of an uphill battle. With Obama having more “secure” electoral college votes than Romney, the challenge was too big to overcome. The public might not like Obama as much as they used to, but with some still blaming the Republicans and there not being enough dislike for Obama, the numbers were never going to add up. Obama needed less of the swing states than Romney in order to claim victory, allowing him to focus resources.

Nate Silver, the author of the NYT 538 Blog, correctly predicted the winner of 49 of the 50 states before the 2008 Election, so his predictions were closely watched this time. Throughout the run up to Election Day this time, his models always predicted that Obama would win. This year, he went one better and correctly called every state. On the other hand, a few polls; including the one found to be most accurate during the 2008 election, Ramussen; did show that Romney had a slight edge in the week before the election. However, due to the way the Electoral College is structured, it was still looking difficult for Romney. This shows that although it might have sometimes seemed that Romney was becoming a contender, in reality, he was still quite far away.

With the focus being on the battle between the two contenders, many haven’t even started to consider the short term or long term ramifications of an Obama victory. At a crucial time, the President is having to make major foreign policy, economic and domestic decisions that will affect the entire world. It’s true that the President, as the most powerful man in the world, always has to make similar decisions, but coming towards a global crossroads, the decisions this time will be even more significant.

In terms of policy, there are a few areas that I think will be key for Obama.

First, with the result confirmed, focus will turn to the economy. The US Treasury Department has announced that it predicts that the US will hit the debt ceiling before the end of the year, posing a challenge to Obama. With the Republicans still controlling the House of Representatives, we could have a similar situation to that in the summer of 2011 when the debt ceiling last had to be raised. The Treasury has confirmed that it can use a series of special powers to keep the government and country running in the short term, but long term the debt ceiling still needs to be dealt with.

Last time, the arguing between both sides led to the country losing its AAA rating, showing that the longer this issue goes on, the bigger the problem gets. This isn’t the first time following an election that the President has forge a deal, with Clinton facing problems in 1996 and Reagan having to work with the Democrats after the 1984 election. However, this time, the divisions between both sides are much worse. It’s highly likely that both sides will come to an agreement eventually, but the short term damage could be significant, with the so called “Fiscal Cliff” leading to tax rises and budget cuts. If these do come into force, the US will be pushed back into recession, likely taking the rest of the world with it. Businesses apparently have a lot of funds ready for investment depending on the outcome of the Fiscal Cliff negotiations, possibly boosting the US economy even further, so there is a lot riding on the President. There is no doubt about it, the Fiscal Cliff is a real problem that Obama needs to tackle, even if it means that he needs to make serious consequences, as the alternative will be far worse.

Another big topic will be the increased the use of drones across the world; which increased massively under Obama’s command; using them to target terrorists in Yemen and Pakistan. The President will likely continue this, again expanding the kill list to include more targets in the areas already covered, as well as adding new names to deal with the killing of the American Ambassador in Benghazi. This is deeply unpopular in most places outside the US, but with the UK also starting to use drones, their use will only intensify.

The tensions between Iran and Israel will continue to build, and with Obama winning a second term it’s unlikely that he will change course, continuing to push for additional sanctions instead of military action. It’s impossible to know exactly what he is planning, but it’s very unlikely that he is seriously considering military action. The Israelis are also unlikely to take action themselves without US support, because anything they do will need backup afterwards from the American Armed Forces. In terms of the other current hotspot, Syria, I don’t see Obama changing course here either. Foreign military intervention would be very difficult, so we won’t see NATO leading a similar mission to the in Libya anytime soon.

Next, the re-election of Obama means that one of his only big achievements in his first term, Obamacare, will now be able to come into force. Extending coverage to the poorest Americans, this is the US government’s biggest intervention into healthcare in history. Although Obamacare does do some good things, such as stopping insurers from denying coverage to people with pre-existing conditions, it doesn’t really tackle the main problem: high insurance costs are just a symptom of high healthcare costs. Therefore, it’s likely that Obamacare won’t have the full desired affect, instead just leading to higher cost for the government and a move towards a state-run healthcare system like that of the NHS in the UK.

While this might solve some of the problems, it is likely to create some more, potentially significant problems. The United States is already running a very high budget deficit and debt level is already high, and all this would do is push these even higher still. There is simply no room for that to happen, with the country not being able to afford it. In the UK, the NHS is proving to be unaffordable, with one NHS Trusts going into administration and others crippled by costs, leading to strain on the whole system. If the government was to allow it the NHS budget to grow as fast as demand, it is likely that the NHS could bring down the whole country.

In addition, unknown to many, in his first term Obama pushed for new trade agreements with other developed economies. The Economic Freedom Alliance act would see a series of negotiations, hopefully leading towards alliances, on an even bigger scale than NAFTA, which was created in 1994. Likely to massively benefit the American economy, Obama is pushing to create a deal with Pacific economies, under the Trans-Pacific Partnership, including Australia, New Zealand and Singapore. Potentially even more exciting, he is also looking to South America, to the world’s sixth largest economy; Brazil. A growing regional power, Brazil is likely to become very important in the coming years, so this is a very smart move by Obama, potentially benefitting the US for many years to come. Most importantly however, the President is also pushing for a deal with the EU. Representing 40% of the World’s GDP, this would be a tremendous economic alliance that could change the composition of world trade. While Obama has done little in his first term, signing any of these deals could be a very significant move, probably creating a legacy will have a massive impact for a very long time.

Looking ahead, there are other ramifications of an Obama win, including the 2016 election.

One potential problem could be that Obama has at times looked tired in the campaign, especially in the first debate. This has been a ferociously fought campaign, but compared to his charisma and optimism in 2008 that led him to the White House, he has been like a different man. Hopefully this won’t continue into his second term. He will not have time to rest, having to deal with a deeply divided country straight away. The United States and the rest of the world will be facing a lot of challenges over the coming years, requiring a President who is at the top of his game so there is no room for error.

On the other side of the political divide, the Republican Party will now be trying to dissect the campaign to see what went wrong. It’s likely that they knew that Romney was never the perfect candidate, with many of the real contenders preferring to stay on the sidelines. It’s possible that infighting could break out; with rumours that the Romney campaign was having remorse towards picking Ryan as the VP pick, instead preferring Christie; as the party comes to terms with being out of power for another four years. However, with their position in the House, it’s likely that they will pull together and be fully prepared to fight in 2016.

Obama’s re-election also sets the scene nicely for the 2016 election. It’s a long time away, but the prospects seem like we could be in for another close, well fought election. The Democrats will need a new contender, most likely Hilary Clinton. Although she lost to Obama in 2008, she’s been increasing her credentials over the past few years as Secretary of State, visiting a record number of countries. She’ll now be taking time out, likely to recuperate and prepare a campaign for the Democratic nomination. The Republicans will also likely have a good, solid contender for 2016, with many of the better contenders who didn’t run this time likely to fancy their chances in 2016. As long as the economy continues to improve, it will likely be very difficult for the party, but with solid contenders, such as Marco Rubio, Paul Ryan or Jed Bush, anything can happen.

Clinton is still a big name in politics, but I fancy the chances of any of the big name Republican contenders. If they had run this time, I think they would have posed a bigger threat to Obama and perhaps have won, but perhaps sensibly, they decided to sit it out. Whatever happens, 2016 is likely to be bigger, better and more intensely fought than any previous election.

In conclusion, the re-election of Obama had become increasingly expected in the run-up to the election. At times it looked like Romney might pose a serious challenge, but in reality this never really materialised due to the Electoral College. It’s now time for Obama to get to grips with politics, as he’s got serious issues to tackle, including the Fiscal Cliff and Obamacare. No doubt it will be a big challenge and he’s got no time to prepare, so he’ll have to hit the ground running. In his first term he didn’t really have many achievements, but this second term gives him the chance to make his mark, potentially leading to a fantastic series of free trade agreements that could setup the US economy for years to come. It’s been a great election, and everything is moving into place for something even better next time around.