The document outlines four scenarios for the 2020 US presidential election and their probabilities and potential economic impacts. It discusses the possibility of a contested election but emphasizes the resilience of US constitutional checks and balances and history of recovering from tumultuous periods. Prior contested elections and crises were resolved through established legal processes. While short-term uncertainties exist, the US has consistently seen GDP growth even after assassinations, riots, and wars, demonstrating its ability to withstand disruption.

1. EULER
HERMES
SCENARIOS OF
CONTESTED
ELECTION
Dan North, North American
Chief Economist

2. Scenario Biden large victory Biden narrow victory Trump narrow victory Trump large victory
Probability 20% 40% 30% 10%
Scenario description
• President Trump cannot make any fraud claims.
• Democrat majority in congress, in the house as well
as in the senate.
• Rapid voting of a USD 2.7 trillion package (net) over
the ten coming years.
• Non-negligible chance that Trump contests the election.
• Possibility that the Supreme Court has to validate the
results, perhaps taking as much as two months.
• No clear majority in the Congress. The house keeps a
Democrat majority and the senate keeps a Republican
majority.
• Negotiation blockade on the budget in the Congress
maintains a possibility of shutdown until Q2 2021.
• No clear majority in the Congress. The house keeps a
Democrat majority and the senate keeps a Republican
majority.
• Non-negligible chance that Biden contests the election,
possibility that the Supreme Court takes as much as two
months to validate the election.
• Joe Biden cannot make any fraud claims.
• Whole congress turns Republican.
Economic impact
• New investment cycle with big infrastructure projects
and redistributive policies.
• Decline of unemployment rate at 5.5% by the end of
2022 (8.4% today).
• US GDP growth at -5.3% y/y in 2020, +4% y/y in 2021
and 3.5% in 2022.
• Less ambitious program. Consensus on Infrastructure
projects but lower re-distribution in favor of households,
not fulfillingof the promise of increasing corporate tax
rate from 21% to 28% (halfway).
• US GDP growth comes at -5.3% in 2020; +3.7% in 2021
and +3.2% in 2022.
• Supply-side policy, extended tax cuts for individuals,
smaller size Infrastructure projects. Uncertainty on
external policy, perspective of harsher tone on China
and re-shoring weighs on the investment cycle despite
tax cut announcements.
• Bold moves on the external side (technology cold war,
tariffs, and sanctions on US companies located abroad)
penalized growth (-5.3% in 2020; +1.7% in 2021 and
+1.2% in 2022)
• Tax cuts, new protectionist measures, bipartisan
adoption of infrastructure program, but less extensive
than Biden because of a less ambitious green plan,
early implementationof other spending cuts.
• US GDP growth comes at -5.3% in 2020, 2.7% in 2021,
1.8% in 2022.
2
EULER HERMES SCENARIOS SPECIFIY POSSIBILITY
OF CONTESTED ELECTION BUT POSITIVE GDP

3. A robust Constitution and a careful system checks and balances have prevailed every time.
• Trump can not change the election date. The Constitution specifies that only Congress can set an election or delay one, which it never has*.
• Trump’s term, accordingto the 20th amendment of the Constitution, “shall” end on January 20th, regardless of whether or not there has been an election. If there is no election, a member of Congress
temporarily becomes President.
Contested elections.
• 1801. The electoralcollege needed 36 attempts to determine a president, eventually voting for Jefferson over Burr.
• 1825. Four candidates ran for President:Adams, Johnson, Jackson, and Crawford. None earned a majority in the electoralcollege, so Congress decided the outcome under the Twelfth Amendment,
making Adams President.
• 1860. Four major parties and candidates in a tumultuous contest serious enough that Lincoln’s election led to the civil war.
• 1876. This was the most contentious election in the nation’s history. Critical issues were at stake which could have conceivably led to a resumption of a civil war – voter turnout was a record high 82%.
Tilden had won a narrow 3% popular vote victory over Hayes, but it still came down to one vote in the electoralcollege up until the eve of its meeting. The matter was eventually settled by the electors in the
Compromise of 1877 with Hayes declared the winner.
• 2000. This was the only time the Supreme Court became involved and it was only indirectly. There was a dispute over ballots in Florida, a case was filed and heard by the Supreme Court, Bush prevailed
and won the state of Florida. The Court did not rule that he won the Presidentialelection, it merely decided on the validity and counting of Florida ballots.
*Congressdelayed two electionsearly in the country’s history for purely administrative reasons.
3
US HISTORY OF CONTESTED ELECTIONS

4. 4
SPECIFIC PROCEDURE FOR SETTLING CONTESTED
ELECTIONS

5. Trump’s record in the Courts is poor.
• Trump’s administration has lost 65 cases and challenges in the court during the first two years of the
administration.
• 90% of the administration’s efforts to roll back existing federal regulations have also been struck down.
Major Decisions in Federal and Supreme Courts.
• Blocked: Letting employers not offer birth control coverage.
• Blocked: Putting a citizenship question on the 2020 census.
• Blocked: Cutting teen pregnancy prevention funding.
• Blocked: Family separations under the “zero tolerance” policy.
• Blocked: Asylum ban.
• Blocked: Making migrants wait for the asylum hearings in Mexico.
• Blocked: Sanctuary cities crackdowns.
• Blocked: Ending DACA (Deferred Action for Childhood Arrivals)
• Mixed: Rolling back environmental regulations.
• Allowed: Transgender military ban.
• Allowed: The travel ban.
5
COURTS HAVE PROVIDED CHECKS AND BALANCES

6. Civil War: 1861-1865
Assassinations: 30 attempts to kill an incumbent or former president or
president elect, but the last resulting in a casualty was 39 years ago.
• Killed: Lincoln (1865), McKinley (1901), Garfield (1881), Kennedy (1963)
• Injured: Teddy Roosevelt (1912) and Regan (1981)
The 1960s were even more tumultuous than the present.
• There were three successful assassinations which greatly affected America – President John F. Kennedy (1963),
Robert Fitzgerald Kennedy (1968), and Martin Luther King (1968).
• Hundreds of race riots in nearly every mid-sized to major cities such as New York, Chicago, Los Angeles,
Atlanta, Boston, Detroit, Washington D.C., Baltimore…etc. Much worse than 2020.
• 1967, the “Long Hot Summer” which 159 race riots.
• 1968, riots across 125 cities after MLK’s assassination.
• Vietnam war, and war protests throughout the ‘60s and ‘70s
The results demonstrate a resilient nation with positive GDP growth
throughout.
6
US HISTORY OF TUMULTUOUS TIMES FOLLOWED BY
RESILIENCE AND RECOVERY
Event Year GDP
Garfield Assassination
1881 3.7%
1882 6.6%
McKinley
Assassination
1901 12.2%
1902 1.7%
JFK Assassination
1963 4.4%
1964 5.8%
Event Year GDP
1967-68 riots
1967 2.7%
1968 4.9%
1969 3.1%
Vietnam War 1965-73 4.2%
Average during events 4.9%
Average since 1881 3.6%