If you spend much time listening to their political ads, you’ll hear the two presidential candidates saying basically the same thing: “Your financial well-being will be hurt by (insert candidate name here ) if you vote for them because they will (insert campaign promise allegedly pledged by said candidate).”
The implication is that presidents have ultimate power over interest rates, taxes, income, financial markets, and the economy in general.
Reality check: They have some, but not nearly as much as we’re led to believe.
Yes, they may have a “pen and a phone,” and executive orders tend to fly out of the Oval Office like pigeons off the White House roof after the inauguration, but history tells us that presidential elections have historically had relatively little impact on these things.
The party that gains control of the Congress tends to have much more.
Presidential candidates can and do make all sorts of promises about what they’ll do if elected, but Congress almost always has to turn those proposals into laws.
For example, Kamala Harris has said she will give qualified first-time homebuyers $25,000 in down payment assistance.
She doesn’t write the checks, and such a promise may or may not get those voters to the polls. However, it’s estimated to cost around $200 billion over four years and likely add to the federal debt, which would necessitate congressional approval—they write them.
That’s why, in many ways, the outcome of the House and Senate elections will have a greater impact on major economic policy issues than the presidential election. The two most significant issues they will grapple with are the debt limit and taxes, regardless of who wins the White House.
The biggies
#1-The debt limit
You probably remember this movie. In June 2023, Congress agreed to suspend the U.S. debt limit until January 1, 2025.
The debt limit is the maximum amount of debt the U.S. government can accumulate, and failing to raise it could lead to a historic default. By this January, the debt will likely exceed $36 trillion, and while the Treasury can use temporary measures to delay a default, Congress will need to address the issue by spring 2025.
Uncertainty over the debt ceiling has caused market volatility in recent years (investors don’t like the idea of the U.S. not paying its bills), regardless of who the President is, and that will continue in the future.
#2-Income taxes
The 2017 tax cuts are set to expire at the end of 2025, making tax legislation a key priority in 2024.
Both presidential candidates have outlined their tax plans. Trump supports extending all current provisions and eliminating taxes on tips, Social Security benefits, and overtime pay.
Those will help some, but perhaps not as much as many may think.
Many people who work for a small hourly wage and tips, and a high percentage of Social Security recipients, already don’t pay any federal income tax or pay very little. Those earning a higher wage, which increases with overtime pay, may benefit more.
Harris favors letting tax cuts for those with higher incomes expire while keeping those for lower-income individuals and proposes expanding the child tax credit and offering tax breaks for first-time homebuyers and small business owners.
This would translate into higher marginal tax rates (perhaps a return to 2017 levels) for high-income households. This will increase tax revenue but will do little to reduce the federal deficit. Tax credits are an immediate benefit to those who receive them, and there has been some support for the child tax credit from both sides of the aisle.
However, the bottom line is that it would require a candidate’s party to win the presidency and both houses of Congress to pass their tax plan, which is unlikely. A divided government would make tax negotiations unpredictable, and a stalemate would result in a default back to the 2017 tax rules.
That said, I think most of us should expect to pay at least a little more in taxes. Whether that will be a big deal for you depends on your situation.
#3-Abortion
I’m going to add another big issue to this list: abortion, a central issue to many conservative Christians and also to many liberal democrats, including those who say they are Christians.
Most pro-life Christians would like to see a legal ban on all abortions. Since the repeal of Roe v. Wade, the issue has been left to the states, so the focus is on whether either candidate would try to enact federal legislation to allow or prohibit abortion across the country. Still, neither candidate’s position will be satisfactory to many confessing Christians.
Kamala Harris strongly rejects efforts to restrict abortion, blaming Trump for the Supreme Court’s reversal of Roe v. Wade. She has called this decision a “horrific, heartbreaking reality” and advocates for Congress to pass a national law codifying abortion rights.
Harris supports removing the Senate filibuster to reinstate Roe v. Wade and protect abortion access up to fetal viability (around 22 weeks).
She has been an outspoken advocate for “reproductive health” as vice president and in her 2024 presidential campaign. As a senator, she opposed a bill banning abortion after 20 weeks but supports exceptions for rape, incest, and threats to the life or health of the mother and co-sponsored legislation to prevent states from imposing abortion restrictions.
On medication abortion, Harris emphasizes the Biden administration’s defense of access to mifepristone and the FDA’s regulatory independence.
Donald Trump, while self-identifying as the “most pro-life president,” has shifted his stance over the years. He believes that states should determine abortion policies. Trump’s vice-presidential nominee, JD Vance, has stated that Trump would veto a national abortion ban, though Trump has not explicitly confirmed this.
Trump has fluctuated on specific policies, recently suggesting that a six-week abortion ban in Florida was too strict before retracting that position. Trump broadly supports exceptions for rape, incest, and cases where the mother’s life is at risk.
On medication abortion, Trump has expressed openness to using federal regulatory powers to restrict Mifepristone despite previously praising a Supreme Court decision maintaining access to the drug.
Trump’s positions have confused many conservative evangelical Christians, but the democrat position remains the most extreme. Still, it’s hard to say whether a federal abortion ban or one essentially reinstating Row v. Wade will happen, as it all depends on Congress.
What should investors do?
Although the President and Congress can certainly pass legislation that impacts the economic health of the government, businesses, and society, that tends to happen slowly, and Congress isn’t always in sync with the President’s values, beliefs, or agendas on every issue.
In our economic system, innovation, growth, and profitability in the private sector are the biggest factors driving the markets. But, not unexpectedly, many pull the economic fire alarm whenever a major election (and potential for government control to shift from one party to another) is at hand.
For example, I recently received a spam email that said this:
“And now, we’ve got Kamala Harris and Tim Walz are doing everything they can to snatch the reigns of power. And if you think they don’t want to get their hands on your money, one way or another, you’ve got another thing coming! That’s why thousands of hard-working patriots like you and me are taking these steps to protect their livelihoods, retirement savings, and investments! I took action myself and couldn’t be happier with my decision.”
I was pretty sure I knew what the pitch was for even without investigating further, but I clicked on the ad anyway, and sure enough, it was for purchasing gold. These ads tend to appear during a big election, stoking anger and fear.
Since I started working after college in the 1970s, there have been nine presidential administrations; the next will be the tenth. Also, during that time, I’ve seen both parties controlling Congress, although, as you can see from the chart below, it tends to be short-lived:
Despite the changes in government from one election to the next and all the intervening market ups and downs, the S&P 500 has grown nearly 2000% since 1994, averaging over 10% annual returns (not inflation-adjusted), and this 20-year period included big challenges like the dot-com crash, the 2008 recession, 9/11, and COVID-19.
The lesson is that trying to time the market, especially during political transitions, often leads to poor outcomes.
For example, investors who stayed in the market from 1999 to 2024 saw a 675% return, while those who exited during the 2008 crisis had much lower returns.
Presidential policies can undoubtedly influence the market, but corporate profitability is a more significant factor. Long-term investors benefit from staying steady, regardless of who’s in power, even if the markets overreact in the short term. (I will acknowledge that can be hard, especially when an incoming president’s “proposed” economic policies seem more destructive than constructive.)
Once in power, things remain unpredictable, as policy proposals often change during negotiations. If the President tries to act outside of congressional approval, there can be repercussions, not the least of which are legal challenges that can go all the way to the Supreme Court.
Amidst all this, I think wise and discerning retirement stewards should focus on long-term goals, align their risk tolerance with their asset allocation, and avoid letting the candidates’ grand proclamations and political biases affect their investment decisions. This includes those of us already in retirement who can be tempted by uncertainty and fear to make impulsive, often unwise, decisions.
Although our emotions suggest otherwise, staying invested through uncertainty has proven successful. So, it’s best to stay the course if you’re comfortable with your investments and asset allocation and their risk profile and they have met your overall financial goals and objectives thus far.
But if you have significant concerns, talk to a trusted advisor and get wise counsel before making any drastic changes.
What should Christians do?
I’m certainly not what you’d call a political activist. Nor do I believe that a particular brand of politics is the answer to all our problems (although some political ideologies are better than others, in my opinion).
Both political parties have their faults, but that doesn’t mean they have absolute moral equivalency, especially on the issues that matter most to conservative evangelical Christians with strong convictions.
I am grateful to live in a country where we can form opinions about engaging in the political process and deciding who to vote for based on our primary and secondary convictions as best we can.
Our Christian beliefs and convictions can provide a moral and ethical framework to guide our political ideology and engagement in the political process.
When it comes to voting, we basically have three choices: 1) stay home and not vote, 2) write in a third candidate’s (or your pastor’s) name (just kidding on the latter, but some people do), or 3) vote for one of the two major party candidates.
With liberty of conscience, I believe that Christians can choose any of these three options. But that doesn’t mean that all are equally effective in advancing our Christian beliefs, values, and convictions in our country and worldwide.
Therefore, I think Christians should at least consider being involved in the political process by voting. I believe that some level of political engagement is both a duty and a responsibility of Christians, if for no other reason than to restrain ungodly leadership for the good of our world (Prov. 28:12) and protect our freedom to worship God as we choose (1 Tim. 2:1-4).
I found this from pastor and theologian Kevin DeYoung in his article “What am I Doing When I Vote?” to be helpful:
“You may think John Piper would make the best president, but writing in ‘John Piper’ every four years does absolutely nothing to advance all the virtues and ideas you like about John Piper. You end up feeling good without doing good, which is not a particularly helpful way to approach voting in a fallen world.”
In another recent article about the qualities we should look for in our leaders, DeYoung says this (my parentheticals):
“There are many passages in the Bible that talk about godly character and personal holiness. In a best-case scenario, we would have Spirit-filled, Bible-saturated, theologically-sound, sincere Christians to rule over us. But often [almost always] that will [sadly] not be the case.”
Then, drawing from Proverbs, he lists five qualities that we should at least look for in our politicians: wisdom, understanding, justice, humility, and self-control.
It’s a hard list for any candidate to live up to; I’m pretty sure neither of the two major presidential candidates checks all those boxes. DeYoung acknowledges that they seem to be in “short supply.” Still, he encourages us to,
“. . . at least acknowledge that this is what we should be looking for in our political leaders. As Christians we must never excuse the lack of these qualities in our presidents and prime ministers. It is foolish to deny or downplay reality when these virtues are lacking, let alone defend or celebrate the opposite. To the degree that our political leaders are foolish, morally ignorant, unjust, proud, and devoid of self-control, we should lament, not laugh or look the other way.”
It’s more than just semantics to say that we can separate supporting a candidate’s policy positions from endorsing, recommending, or commending them as individuals, especially regarding their character.
That said, it’s also possible that a candidate has crossed a “red line” regarding their character and/or behavior. You may decide not to vote for them regardless of their political promises or policy positions as a matter of conscience and conviction. Of course, that leaves you with a dilemma—whether to vote for the other candidate, or someone else, or not at all.
But it also suggests that it’s possible to support a candidate with few of the five qualities DeYoung lists and in the privacy of a voting booth because they best align with our biblically-informed convictions and political priorities even if we choose not to endorse, recommend, or commend them in any way publicly.
An important implication is that we don’t have to love everything about the candidate to vote for them wisely. Nor do we have to be loyal and defend everything they say or do (thank goodness!).
However, if this functional, more pragmatic approach to voting doesn’t align with your convictions, you shouldn’t vote for either major party candidate if you can’t do so in good conscience. If that’s your conviction, you could vote for someone not on the ballot.
Voting with conviction and compassion
One of our elders recently prayed this on a Sunday morning: “Lord, help us to go into the world and live lives of conviction and compassion.” This resonated with me, and it provides a good foundation for how we might engage in politics and other spheres of life.
I also found this more general definition of ”conviction” from bible.org to be helpful:
”Conviction refers to the state of being convinced and confident that something is true; it means a strong persuasion or belief. In other words, conviction stands opposed to doubt and skepticism., . . Biblical conviction is really the product of three things that characterize the ideal Christian leader or the person of maturity: (a) a commitment to Scripture as one’s authority, (b) the construction of specific beliefs and convictions based on that authority, and (c) the courage to act on those convictions in faith.”
Christians in every generation must know what they believe about themselves, others, and the world. Only then can we declare and advocate for His truth with clarity and conviction in a fallen and confused world where truth has become relative and the mantra of the day is ”my truth is truth.”
Christians believe that truth is God’s truth, and we embrace a biblical understanding of reality. My truth isn’t truth; we don’t “live our truth,” we live God’s truth!
The truths we believe and live out are based on biblical absolutes (first-tier convictions) and contained in the creeds written and adopted by the Church over the centuries. As Christians, we must hold firm to our biblical convictions—truths rooted in Scripture and expressed in the Church’s confessions and creeds.
Living with conviction means anchoring ourselves in these unchanging truths, even when our culture shifts or when politics disappoint; both are an almost absolute certainty.
I will acknowledge that I find this election particularly challenging. Like 2020, it’s marked by extreme polarization. We thought we’d have the same two candidates, but then that changed—suddenly, but not totally unexpectedly. Things really heated up after that.
But despite the noise and chaos, God remains sovereign (Prov. 16:9, Dan. 2:37-38), and as Christians, we have the responsibility to vote according to our convictions. While no candidate may perfectly embody our biblical values or share all our convictions, voting is an opportunity to express our beliefs and convictions in the political arena.
There’s more to this than just conviction; conviction without compassion leads to self-righteousness.
Compassion as a virtue is prevalent throughout the Scripture; we see it in the Old and New Testaments. I like this definition from Ligonier Ministries:
”Compassion is being moved in the affections of our inner being when we see the distress of others, coupled with a subsequent outer movement of action in which we seek to alleviate that distress out of love for God and love for neighbor.”
Our best example of living a life of compassion was Christ himself. We see it on display in almost all his encounters with people. His Spirit called and transformed us to be more like him, full of grace and truth (John 1:17), so conviction and compassion characterize our interactions with others, as he did.
To be in Christ is to be united to a Savior whose heart was “moved with compassion” when he saw the confusion, ignorance, and moral perplexity of those he came to seek and to save (Luke 19:10). Such people surround us in the world we live in today.
His compassion was so great that he not only called those in darkness to turn to him as the Light of the World, the One who came speaking the very words of eternal life, but he also showed compassion through his deeds and by sacrificing his life as a ransom for many (1 Tim. 2:6).
Compassion, as modeled by Christ, means showing genuine love and concern for those in distress, even if we disagree with them. Compassion doesn’t mean compromising on truth but engaging with humility and grace. We’re called to be compassionate even toward those who oppose our views, extending kindness in the public square.
Ultimately, we reflect God’s truth, love, and compassion toward others by living with conviction and compassion. Regardless of the election’s outcome, we know God is in control. Our role is to live out our convictions in a way that brings peace and compassion to the world (Rom. 12:18).
