As of writing, it's one day before election results and I expect that Democrats will take a fairly big hit. Conservatives claim it means that Americans reject Keynesian economics (stimulus plans) and the new healthcare legislation.
The truth is that the new healthcare legislation has only begun to kick in and won't have any noticeable impact on the economy any time soon. Further, the unemployed have an even bigger need for healthcare insurance help during a bad economy.
What's really happening can be compared to being stuck in a deep ditch, where the ditch represents the economy. The Democrats have not been able to get the voter's car out of the ditch such that the voter is now trying a different towing company, some if it out of spite. They may not even understand why the first towing company couldn't get them out of the ditch; they just know they want to be pulled out somehow by someone. Bad economies have always been hard on incumbents, regardless of fault. The T-party movement itself wouldn't be so popular if voters were happy with the GOP.
That being said, perhaps there is no quick fix to the economy. Our stimulus was too small because Bush spent our rainy day fund. China's stimulus worked because they had saved up a nice big rainy-day fund (largely due to lopsided trading with the US).
The USA's financial infrastructure is still choking on bad home loans and probably will be for a several years. The mortgage problems also keep people from moving to new jobs in different cities because they can't sell their houses without taking a huge loss, which further clogs up the arteries of the economy and slows the natural corrective powers of worker churn.
And even profitable companies are still not hiring because they want to see consumer demand increase first. Expected consumption patterns are primarily what guide their staffing levels. Yet, consumers won't do much big spending until they feel secure in their jobs. Thus, it's a big game of chicken between consumers and producers.
Many conservatives claim that tax-cuts for the wealthy will jump-start the economy. Not likely. They didn't speed up recovery from the dot-com meltdown nor prevent another meltdown. Big-biz lobbyists have spent billions pushing that myth, and duped a lot of conservatives into thinking tax-cuts for the rich is some kind of magic economic crack. Perhaps it is, if the crack high is comparable to yet another bubble.
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