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October 31, 2012
Even as Europe grapples with a debt crisis that threatens the whole region, and China attempts to put the brakes on a slowing economy - the U.S. election is commanding headlines around the world. Global citizens want to know who Americans will choose as their new leader. Because whoever wins in November will control the largest purse string in the world, and with it - the ability to shape the global economy.
If the polls are right, the 2012 election will be decided by a few crucial votes in a handful of hotly contested states. But far from being just a domestic ballot - Bruce Stokes at the Pew research Center says the U.S. election will have global implications.
"Oh absolutely, the Americans get to vote in this election but the world gets to deal with the consequences," said Stokes.
With a gross domestic product equal to about a quarter of the world's total output, no other country has a larger economic footprint. A common refrain among economists is that when the U.S. sniffles, the rest of the world catches a cold.
Desmond Lachman is a macroeconomist at the conservative leaning American Enterprise Institute.
"We saw that clearly in the 2008-2009 great economic recession, events that occurred in the United States banking system reverberated right through the globe," said Lachman.
On the campaign trail, both candidates agree a healthy U.S. economy is crucial to global stability. Both have assured Americans they have a plan to bolster the economy - starting with Republican hopeful Mitt Romney, who promises to level the playing field by getting tough on China.
"On day one, I will label China a currency manipulator, which will allow me as president to be able to put in place, if necessary, tariffs where I believe that they are taking unfair advantage of our manufacturers," said Romney.
Fighting to win a second term, President Obama says U.S. trade has increased significantly under his leadership. So has China's undervalued currency, which he says has risen 11 percent since he took office.
The key to a strong economy says Obama is to bring manufacturing jobs back to the U.S. and he says Romney is the wrong person to do it.
"Keep in mind that Governor Romney invested in companies that were pioneers of outsourcing to China. Governor, you're the last person who is going to get tough on China," said President Obama.
But China is only part of a larger equation. The debt crisis in Europe has reduced demand for U.S. goods. Desmond Lachman says deepening problems in the 17-nation eurozone could further slow growth - worldwide.
"My expectation is that Europe, being the largest trading partner of the United States is going to pose real challenges to the United States in the years ahead," he said.
Lachman says Romney offers a more business friendly approach to solving the nation's chronically high unemployment. But the Pew Center's Bruce Stokes says given Obama's popularity in many parts of the world, the image of the U.S. could suffer under a Romney presidency.
"China, very interesting. I do think given Romney's rhetoric, there could be a short term hit to America's image in China. The big hit is going to be in Europe," said Stokes.
A recent survey by the Pew Center shows Western Europe overwhelmingly in favor of a second term for Obama: 92 percent in France, 89 percent in Germany and 73 percent in Britain. However, the president scored poorly in Greece where only 22 percent approved of his handling of the global economy.
Whoever wins, Lachman says there's a lot at stake, particularly if a divided Congress is unable to agree on drastic spending cuts at the end of the year.
"If things go wrong in the United States that would certainly have huge global ramifications, particularly right now with the rest of the world not being in good shape, the last thing they need is for the United States to be stumbling," he said.
History suggests the world will adapt to whomever America chooses. What is clear say experts is that the outcome will shape economic and geopolitical attitudes around the world for years to come.
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