CAP Expert Michael Ettlinger Shows How Stalling in Debt Limit Talks Is Costing Americans Their Jobs
We’ve all heard about what could happen if Congress fails to raise the federal debt limit: the immediate withdrawal of billions of dollars from the global economy, with ripple effects across markets worldwide. The loss could be greater than that suffered in the worst quarter of the Great Recession.
What you probably haven’t heard, though, is that the uncertainty over the debt limit is hurting the economy. CAP Vice President for Economic Policy Michael Ettlinger writes in a recent article, “Most businesses don’t make big investments or ramp up hiring when they see a substantial risk of the economy tanking.” Uncertainty makes companies less likely to take risks, make investments, and hire new employees.
Predictable governments make for stronger economies, and even if the chance of inaction on the debt limit is small, the risk is big enough to cause companies to be more cautious. Ettlinger writes, “Businesses in this country hire millions of people each month, and if that caution is causing just 100,000 or 200,000 fewer hires than would otherwise occur, that would show up as a large impact on net job creation.”
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