Voters, angered by the state of the economy and frustrated with the failure of the Democrats to make it better despite controlling the White House and both houses of Congress, will hand the Republicans a sweeping victory in the election, including a majority in the House.
The leaders of the Republican party will misinterpret the victory as an approval of their policies rather than a rebuke of Congress' behavior in general (including theirs), and will tack to the right instead of the center. The leaders of the Democratic party will likewise misinterpret the loss as a failure to understand their policies rather than recognizing that voters understand and simply disapprove, leading them to tack to the left instead of the center. The White House will view the losses as voter frustration borne of misunderstanding and ignorance, and dismiss the significance of the message entirely. Any attempt at bi-partisanship will be abandoned. With Congress thus deadlocked, neither party will be able to enact any meaningful legislation for the next few years.
Suddenly freed from interference by either side, the economy, the housing market, and unemployment will gradually improve on their own. No dramatic recovery, just a slow, steady climb.
In 2012, the Republicans will claim that the recovery is entirely their doing, and that the Democrats would have kept the country mired in recession if it hadn't been for them. The Democrats, on the other hand, will claim that the Republicans short-circuited the swift recovery they would have achieved, and that we'd all be better off if they had stayed in control. Both will be incorrect.
With the economy's recovery, voters will lose much of their anger, but will remain annoyed by the partisanship and arrogance of both parties. As a result, the Tea Party will retain its influence in particular races where both major party candidates are drastically out of sync with popular opinion, but will not develop into a viable third party.
President Obama, having been unsuccessful in passing any major legislation in the second half of his term will base his re-election run on claiming credit for the economic recovery but will ultimately lose in the Democratic Primary to a more liberal candidate who better represents the core of the party's supporters following the leftward tack after the midterm elections. The Republicans will nominate an ultra-conservative candidate in keeping with their belief that the voters rejected liberal ideals in the midterm elections. Voters in general will truly like neither, but will hold their nose and vote for the less offensive candidate.
Agree? Disagree? Reasoned Discourse is welcomed...