Economy on the Cliff

Wednesday, August 08, 2012

Budget deficits, projected through 2022. The "CBO Baseline" shows the effects of the fiscal cliff. "Alternative Scenario" is the extension of the Bush tax cuts and the rollback of spending cuts. (Wikipedia Commons)

Business Day reporter for The New York Times, Nelson Schwartz, talks about the effects the federal budgetary "cliff" is already having on corporate spending.


Nelson Schwartz

Comments [20]

scott from soho

I think that before anyone posts a message on this forum,they should be required to give a brief overview of what they do. They should also mention how much they have paid in taxes, and where they get their information outside of Hannity, WNYC, or The Daily Show.

Aug. 08 2012 07:06 PM

you wish it was taxpayer funded radio -- chuzz, you are addicted -- so ante up.

Aug. 08 2012 11:41 AM
Martin Chuzzlewit from Manhattan

Hey, Becky-

Who cares what you're tired of?
We don't write for you. It's taxpayer funded radio and half of America doesn't think Barry is doing such a great job.
.....and you and your attacks are nonentities.

Aug. 08 2012 11:18 AM
Jack Jackson from Central New Jersey

Strange balance - WITHOUT the $1T the government spends on defense and intelligence, we would not need to borrow a dime. However, we are not likely to cut either of these entirely, are we? Military spending is some of the least productive spending that a modern economy can do since the product of the spending - bombs and death - aren't really intended to build the future domestic economy any larger. Their intent is to blow apart other people's economies and keep them from harming your citizens and your economy. Even at that the multiplier of military spending is only 1x or 2x below typical consumption spending. We need to build down our defense investment wisely such that foreign countries don't take advantage of the 'vacuum'. The cliff that comes in January is not a wise build down. I hope the Tea Party is happy with the threat they have caused to us all.

Aug. 08 2012 10:57 AM
The Truth from Becky

I am tire of people attacking the current administration and not offereing the grass greener view of what is on the other side. Not detailing what is on the other side of the coin that is/ or would be so great for all of us! All they provide are their race based insults towards The President of these United States, eliminating the name bush in all of their 3 paragraphs of bull...tired of the 'He is spending all of our money, our grandchildren's money" non sense! and they wonder why people call them racists. They can't articulate WHY we should all want mitt or any repub in office! Gary is full of talking points and Martin is full of *%$! I am sick of both of their negative attitudes.

Aug. 08 2012 10:40 AM
The Truth from Becky

Question to all the "what Obama hasn't done" bandwagon people, ie complainers and rabblerousers....what exactly HAVE the repubs done so well? I mean since they have control of the House and all?

Aug. 08 2012 10:26 AM

Ya its just the Conservatives that stoke the war machine...sheesh

Aug. 08 2012 10:24 AM
jgarbuz from Queens

To Hugh Samson

Yes, government has been a major driver of employment since early WWII, in defense industries and in NASA and in expanding government bureaucracies, etc. Just Monday we saw a brilliant example of advanced American manufacturing when the latest sophisticated robot landed on Mars at a cost of over $2 billion taxpayer dollars. But how does that add to reducing our national debt? Will we sell Martian rovers to the Chinese or Russians or Japanese to recoup some of that $2 billion dollars? Wonderful science and technology, but if you can't or won't sell it to customers, how does that add to our economy overall? It'snot enough just to run deficits employing people. You have to sell their product at a profit for wealth to be created, or at least reduce the debt incurred.

Aug. 08 2012 10:22 AM
Hugh Sansom

Note how frequently we hear _conservatives_ argue that the reason preserve military spending is because of _jobs_.

That's a Keynesian demand-based argument for military spending. So conservatives are very happy to be Keynesian when it serves their little darlings in the military or the 1 percent.

Aug. 08 2012 10:21 AM
RJ from prospect hts.

Please. Large companies have been hoarding cash and using one excuse or another not to spend it--"private" fiscal stimulus--since 2007 or so. I'm laying odds they'd much prefer to hoard until the inequality spectrum evens out--enough people to serve their homes and make their widgets but not enough to come together in unions and wage some power.

Aug. 08 2012 10:19 AM
Sheldon from Brooklyn

I just love you guys. Still with the weak-minded group think: it's Obama's fault, no it's the GOP's fault, no it's congress's fault, wait - it's the Dems' mess.

If I hire TWO contractors to build me a house in 6 months, and after two years, the project is 3x over budget and only the foundation is laid, guess who I am firing - ALL OF THEM.

300+ million people, 50 states, and just two crappy parties.

Aug. 08 2012 10:18 AM
jgarbuz from Queens

Economic growth has been radically reduced around the world. I believe the major reasons are higher energy costs and changing demographics. Higher energy costs is self-explanatory, but by "changing demographics" I mean the aging population with few productive young workers available, many of whom have been mis-educated for the needs of today's more knowledge-based industries. In the West and Japan and soon China, it'll be too many non-productive old people, yours truly included, and not enough correctly educated people to fill the more technically demanding jobs we are still producing. So education is also an important variable, but until we get more productive young people, or reduce the number of needy old people, we are on very thin ice for at least a decade or two to come.

Aug. 08 2012 10:17 AM
rose from Long Island

Corporations can delay without affecting productivity, therefore I believe that for political reasons, they are delaying hiring.

Aug. 08 2012 10:16 AM
Hugh Sansom

The business-owner from Connecticut nails the economics far better than 99 percent of the Romney advisers or Chicago-style economists. Demand drives business hiring. The reason the fiscal cliff is a cliff is that the government is a huge source of demand in the economy. But conservatives simply ignore this fact.

Aug. 08 2012 10:15 AM

The media needs to stop with this garbage about the fiscal cliff. These cuts are absolutely necessary. Businesses don't care about money we WASTE on military unless they are getting it.

Aug. 08 2012 10:13 AM

Most of Europe is worse off than the US, and Obama is not the president of those countries. And the Dow keeps going up. You guys kill me with your selective facts. The stalemate in congress is not going to change until after Nov., but you can keep trotting out the angry tidbits.

Aug. 08 2012 10:12 AM
Hugh Sansom

Under right-wing dogma, the "fiscal cliff" _cannot_ exist. Under the Chicago School dogma, government spending "crowds out" business spending. So an end to large segments of government spending _must_ be a good thing — under the right-wing dogma.

Aug. 08 2012 10:10 AM
gary from queens

Obama is responsible for two-thirds of the national debt after just 4 yrs in office We have government workers who are still in the top 10% of income earners (most make 60K+) demanding more from lower income private sector workers who pay more for their own health and retirement benefits.

Why is our economy expanding at a record low of under 1 percent under Obama? Because Obama's policies that affects business has discouraged private investment. He continues to villify and threaten to penalize the top 2 percent of income earners----which includes those earning $250k and above, as well as the profits of thousands of small business owners and investors in that category.

And even after S&P's downgrade of US Treasury notes----because our debt-to-GDP ratio was heading past 80% within 3 years----Obama was out there proposing even more spending programs to supposedly stimulate private investment! This is insane. As the Wall Street Journal’s editorial noted on August 8th----exactly one year ago----following the downgrade, debt-to-GDP has shot up over 40 percent since Obama took office.

Obama's current "jobs" bill was trotted out just to demonize "uncaring" Republicans for the Fall elections----knowing they would have to oppose it to APPEAR as responsible budget hawks (they are really not!) to the mobilized tea party. How do we know that? Obama's price tag of the legislation is miniscule compared to his previous extravagant 2 trillion dollars worth of "stimulus". And the previous government debt-spending accomplished nothing, except get us deeper into debt.

Aug. 08 2012 08:43 AM
Martin Chuzzlewit from Manhattan

No, Ed, that would be the Democrat-lead U.S. Senate which has not passed a budget in 3 years, and voted 98-0 (!) in April against their own President's most recent one. Unbelievable "leadership".
Of course, let's remember the Senate leader is Harry Reid who has called Obama a "light-skinned" African American "'with no Negro dialect unless he wanted to have one".

(Reid to Obama: Sorry for 'no Negro Dialect' Remark - YouTube Jan 10, 2010 - 2 min - Uploaded by AssociatedPress)

Aug. 08 2012 08:01 AM
Ed from Larchmont

During his time in office President Obama hasn't passed a budget, as I understand it. This is a first.

Aug. 08 2012 05:56 AM

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