KENTUCKY (11/22/12) – Jobs are on the block as employers grapple with uncertainty. Employers are still smarting from the 2008-9 recession and how they did not see it coming. They were “blindsided”!
Adding to uncertainty for small business is the health care mandates under ObamaCare, the federal debt, energy costs and increasing regulations on business. Now there is a new buzzword that the media and elected officials are referring to as the “Fiscal Cliff”. This is not, however, the REAL Fiscal Cliff that Congress and the President are debating.
The REAL Fiscal Cliff is when there are no more options. The REAL Fiscal Cliff is when the natural order of economics trumps voodoo economics and the smoke and mirrors of Washington DC. The REAL Fiscal Cliff is when the US Dollar loses value each month and the United States Government can no longer pay its bills. The United States goes into default.
Many believe that the next few weeks will determine our destiny. Will the U.S. act to avoid the REAL Fiscal Cliff or will we once again “kick the can down the road” making the REAL Fiscal Cliff more likely. To fix the problem we must balance the federal budget. This will be painful with increased taxes and large cuts to federal spending including social programs. A deeply divided, partisan Congress adopting a sustainable solution to these highly complex problems seems virtually impossible.
The quickest and least painful way to balance the budget is to rapidly grow the economy. But a review by the Wall Street Journal of securities filings and conference calls finds that half of the nation's 40 biggest publicly traded corporate spenders are slowing expenditures this year or next. Meanwhile, exports are slowing or falling to such critical markets as China and the euro zone as the global economy slows. These developments are not helpful to the US debt problems.
Corporate executives say they are slowing or delaying big projects amid easing demand and rising uncertainty. Many small business owners are beyond uncertainty. They are fearful. The Wall Street Journal also credits uncertainty around the U.S. elections and federal budget policies as among the factors driving the investment pullback since midyear. “Companies fear that a failure to avoid the so-called fiscal cliff will tip the economy back into recession by weakening consumer spending, damaging investor confidence, and cutting into corporate profits. A deal to avert the cliff could include tax-code changes, such as revamping tax breaks or rates, that hurt specific sectors.”
If the White House and Congress strike a deal to steer the U.S. away from the REAL Fiscal Cliff, the economy could recover quickly. The President will also have to rein in the bureaucrats and reassure the business community and consumers. Let’s hope and pray they can get it done. Our jobs are in the balance.
To read the full Wall Street Journal article: http://professional.wsj.com/article/SB10001424127887324595904578123593211825394.html
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