A front page story in today’s New York Times echoes the claims made in my previous post regarding the negative effects that uncertain policy...
A front page story in today’s New York Times echoes the claims made in my previous post regarding the negative effects that uncertain policy is having on the American business community. This excerpt captures the potential negative consequences for growth: All told, the political gridlock in the United States, along with the continuing debt crisis in Europe, will shave about half a percentage point off growth in the second half of the year, estimates Vincent Reinhart, chief United States economist at Morgan Stanley. More than 40% of companies surveyed by Morgan Stanley in July cited the fiscal cliff as a major reason for their spending restraint, Mr. Reinhart said. He expects that portion to rise when the poll is repeated this month. “Economists generally overstate the effects of uncertainty on spending, but in this case it does seem to be significant,” he added. “It’s at the macro- and microeconomic levels.”
