Skip to comments.Business leaders say ‘cliff’ deal won’t ease economic uncertainty
Posted on 01/03/2013 11:51:46 AM PST by SeekAndFind
A day after Congress managed to avert the fiscal cliff, business leaders warned that the agreement will hurt sales and hiring, wont unlock investment and leaves the economy riddled with congressionally imposed land mines for months to come.
Markets responded much more favorably, relieved that the worst of the potential crisis had passed. The Standard & Poors 500-stock index rose 2.5 percent on Wednesday, its best single-day gain since last summer, after the House approved a compromise bill to avert most of the tax increases and spending cuts that were scheduled to begin taking effect in the new year.
But analysts warned that the gains could evaporate, especially once lawmakers move on to their next economically perilous battle over raising the federal borrowing limit a battle the cliff agreement did nothing to resolve.
This relief rally in the market today, I dont think its going to last very long, said Ian Shepherdson, chief economist for Pantheon Macroeconomics. Because were going to be slugging this out until February or March, when government finally runs out of money. He predicted a bloody, messy, appalling spectacle among lawmakers that will depress consumer and business sentiment.
Business groups expressed relief on Wednesday that lawmakers had at least avoided catastrophe with the last-minute accord. The deal preserved lower income and investment tax rates for most Americans, extended a package of business tax breaks and bought a two-month delay in pending defense and domestic spending cuts.
But business lobbyists said that because it doesn't stabilize rising federal debt levels, the deal could undermine economic growth. They also worried about the psychological effects on both businesses and consumers of watching lawmakers war again and again in coming months over taxes and spending, under the cloud of a possible sovereign default if they fail to reach agreement.
(Excerpt) Read more at washingtonpost.com ...
Wait, I thought this was the answer to all the nation’s economic ills? Didn’t Obama and the MSM tell us that if “the rich” simply paid more then everything would heal?
Isn’t that what Obama spent a billion campaign dollars telling us. Isn’t that what the corrupt MSM dutifully parroted over and over? Now the economy should BOOM! Unemployment should go down and growth should occur, right?
Obama and the corrupt MSM DEMANDED the $800 billion bailout that they said was absolutely necessary to save the economy, yet this economy has SUCKED for almost 5 years now and there is no end in sight.
Next Obama and the corrupt MSM demanded that ObamaCare get passed to help the economy, but the economy STILL sucks, and ObamaCare is making it worse!
Now Obama and the corrupt MSM told us that if we only tax people more that this will save us all, and now the ComPost dares tell us that, er, well, maybe not!
And the American people willingly - eagerly - accept this misery while they eagerly accept the MSM ongoing demonization of Conservatives.
Enjoy your crap sandwich America because that’s all you will get for at least 4 more years — and you deserve it!
...the fiscal cliff deal wasn’t designed to fix anything...
It was never intended to ease anything.
The only thing that matters to the economy is the permanent tax hikes.
Government services close markets and restrict economic freedom.
As for the continuing debt that is an issue of financing the interest(vs everything else) and/or maintaining obligation creditably. The interest on the debt which is already approaching the size of all deference spending will begin to either require more debt(thus greater interest bills) or smaller budgets elsewhere. That is only short term(next 10 years).
Long term were talking about smaller use-able budgets regardless because of the existing & apparently un-closeable deficit.
In my judgement the politically inevitable outcome of that untenable situation will be a reworking of the Federal debt & interest liability to effectively stop/stall repayment.
This I think is inevitable, because we cant possibly repay existing obligations nor can we get the population or congress cut spending, while the debt & interest payments will continue to grow progressively building upon each-other.
Even as we speak now, there is simply not enough money in theses united States to pay for this Government and its debt.
Don’t worry there will be plenty of money to go around, Bernanke is running the presses at full throttle as we speak. $100 Billion a month forever plus what they don’t tell us about. Granted it won’t be worth a wheelbarrow full of Continental’s, But we will All Be Millionaires subjected to the New Obama Tax on Millionaires.