My Midterms Prediction—Part 2

We pick up today where we left off yesterday—with my prediction for a blue tsunami in the midterms. And the likely fallout.

Voters in America are clearly disillusioned with today’s economy, the impotent jobs market, and a costly war that is attacking family wallets as much as it’s attacking Iranian soil.

Across the board, polling shows widespread voter frustration with the current administration, and betting sites have Democrats winning the House in a landslide and quite likely taking the Senate as well… a blue tsunami.

Problem is, every time one party wins both chambers of Congress, they think it’s a mandate—rather than a reaction against the president in power—and they promptly start enacting laws that anger the electorate, and they lose control in the next election. That’s likely the path America will be on this time around too.

In yesterday’s dispatch, I laid out the situation and proffered two of my five predictions. Here are the remaining three…

Prediction 3: Green energy rallies on hope.

Democrats already have a bill to bring back the wind and solar tax credits that Republicans killed. It’ll fly through a Democratic House. If it clears the Senate, it lands on Trump’s desk for an all-but-assured veto.

Still, hope will likely propel green energy stocks after the election, though the real opportunity doesn’t show up until 2029—and then only if the Democrats don’t blow the next two years so royally that they lose the 2028 White House race.

Prediction 4: Capitol Hill turns into a courtroom.

Over the summer, Speaker Mike Johnson told a room full of conservatives that if Democrats win, they’ll go after the president, his family, his cabinet, his donors, and half the people in that room.

Defense Secretary Pete Hegseth is already facing articles of impeachment over his handling of the Iran war, and those came from a Republican.

Trump’s family business, the crypto deals, the White House ballroom, the Qatari jet—every House committee will be so deep into Team Trump that Political Proctology might be 2027’s term of the year.

Subpoenas, hearings, impeachment talk. All day, every day, for all of next year…

Prediction 5: This one hits your wallet.

Washington has a legal limit on how much it can borrow—the debt ceiling, basically the spending limit on Uncle Sam’s corporate card.

Last year, Republicans raised it by $5 trillion, just enough to get past the midterms, which is a common trick in DC.

Back in 2021, Congress raised the limit just enough to push past the 2022 midterms.

And in 2023, they suspended the ceiling just long enough to get past the 2024 presidential election.

That’s how politicians roll: They want your vote before you see the bill.

America is on track to slam into the current debt ceiling sometime next spring or summer… which means the question of what to do about the debt ceiling slams into a brand-new Democratic Congress.

And here’s where Democrats screw it up. They’ll probably hold the debt ceiling hostage for the Obamacare subsidies and the Medicaid money, and then dare Trump to veto it.

Republicans will put up a showy fight, then grab some popcorn to watch the Democrats struggle with the trap they’re in.

In 2021, Republicans fought the Democrats aggressively, then stepped back and let Democrats hang themselves—$2.5 trillion of new debt on a party-line vote. Republicans then spent all of 2022 yanking on the rope.

Expect a rerun… and that’s what hits your wallet.

In the 2011 debt-ceiling brawl, DC pushed the fight to the edge, and America lost its perfect AAA credit rating from Standard & Poor’s for the first time ever. Back then, the world still ran to the dollar when things got scary. That world is dead and gone.

Foreign governments own a shrinking slice of America’s debt, central banks are grabbing literal tons of gold because they no longer trust the dollar, and all three major credit agencies (S&P, Moody’s, and Fitch) have now downgraded America.

Last year, the dollar had its worst first half since 1973. A debilitating debt ceiling fight very likely pushes the dollar down, which pushes inflation higher in your life.

So, that’s the likely impact of a blue tsunami: Wall Street gets a rally (probably). DC gets a year of hearings (assured). And, as usual, you and I get stuck with the bill for a government run by toddlers with a credit card.