The schoolyard bully Eric wants the class president Johnny to come out and play. The principle says he can’t, he hasn’t finished the homework he was given on Tuesday.
Doesn’t the debt ceiling conversation seem this childish to you?
Some of the other classmates are telling Johnny, “Oh, come on, the beating won’t be that bad out here on the schoolyard.”
Let’s talk a little about what that schoolyard beating might actually look like:
If there is no budget agreement by Aug. 2: Federal spending would instantly have to be reduced by about $100 billion per month. By the end of 2011, federal spending would be about $500 billion lower for the year than it would have been otherwise.
Spending cuts of that size would reduce the U.S.’s 2011 GDP by multiple percentage points. The Q3 and Q4 GDP growth rates would probably be on the order of between -5 percent and -10 percent. (Recall that during the recession of 2008-09, GDP only fell by about 4 percent in total.)
The unemployment rate would be likely to rise from its current level of 9.2 percent, to perhaps 15 percent or more of the U.S. population. Recall that at its worst, the unemployment rate during the Great Recession only reached 10 percent.
So when you read someone blithely writing that the federal government will not default in the absence of a debt ceiling deal, and instead will merely have to trim excess spending, remember that what they’re really advocating is a new and deliberately caused Great Depression.
According to the U.S. Chamber of Commerce, economic uncertainty is the most important challenge facing small businesses, with 49 percent ranking it within the top three concerns; small business owners also feel challenged by the national debt (47 percent), the new health care law (39 percent), and the impact of regulations (36 percent) — and LAST on the list is what D.C. pols are arguing over the most, taxes.
Hey D.C., are you listening?
We only added 18,000 new jobs last month and the trend is downward, your lack of leadership is not working, Washington.
Eighty-four percent of small business owners believe we are headed in the wrong direction economically and 79 percent of business owners want Washington to get out of the way. Eighty-five percent want Washington to offer more assistance or provide more certainty.
Over the next year, 64 percent of small business owners will keep the same number of employees, the math to keep the economy moving doesn’t work, are you listening? There are 201 small business owners in both houses, is how you are managing this crisis how you operate your business back home? Imagine, you close the doors of your business because you can’t figure out if the widget goes in the box before or after the stamp goes on. Are you listening?!
It’s important to remember the debt was tripled during the Reagan years, and the Democrats cried foul.
During the Bush years it was raised 7 times — by 4 trillion dollars — and now Obama wants to raise it and the Republicans are crying foul … sounds like partisanship to me!
I don’t know about you, but what I’m worried about right now is lack of revenue, lack of credit, lack of expansion — and while all of this is going on remaining optimistic for my family, my employees and my customers.
What I say to you in Washington is: GROW UP, quit worrying about being re-elected, quit assuming your values are mine and do your job!
That’s why we sent you there.
Featured Image Credit: http://www.flickr.com/photos/tom_lohdan/