Canadians need to watch US closely
Canadians could be in a for a rough economic ride following the re-election of Barack Obama to four more years in the White House.
Carl Hodge, a political science professor at UBC Okanagan, says Canadians should keep a close eye on what happens south of the border over the next two months.
Hodge, who specializes in US affairs, says the 'fiscal cliff' the US faces January 1 could have dramatic consequences on both sides of the border.
"They are facing a deficit time bomb that must be defused," says Hodge.
He says a failure to meet fiscal shortfalls January 1 will result in deep mandatory budget cuts as well as various tax hikes.
"Happy New Year."
Hodge says some people are looking at it as short term pain for long term gain but he isn't so sure about that.
There is a fear that this could lead the US back into a deep recession, one Hodge says would have an impact in Canada.
Hodge says Obama will have to reach across the aisle to the Republican dominated House of Representatives to try and come up with a solution to the 'fiscal cliff,' something he was unable to do through much of his first term in the White House.
"He has to do things differently," says Hodge who admits Obama is free to make radical changes now that he doesn't have to worry about re-election again in four years.
Hodge says the business community in Canada is already showing its initial disapproval of the election outcome.
The Toronto stock market was down Wednesday as was the S&P/TSX composite index and the TSX Venture Exchange.
As for the outcome of Tuesday's election, Hodge says he was surprised, but not surprised.
"I was a little bit (surprised)," says Carl Hodge who specializes in US affairs at UBCO.
"I thought Obama would win with about 283 or 287 electoral votes. The margin was bigger than I expected."
With Florida still too close to call, Obama has attained 303 electoral votes, 33 more than the 270 required to win the presidency.
Obama said all the right things in his acceptance speech Tuesday night talking about reaching out to leaders from both parties to "meet the challenges we can only solve together."
He told the American people he is more determined and more inspired than ever.
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