Consumer confidence dropped during the shutdown. And with the threat of another shutdown and debt ceiling standoff in early 2014, it is unlikely to rebound fully in the months ahead. Ditto for business investment, which has been weakest in precisely those areas that require taking the most risk, including research and development. Bond investors demanded sharply higher interest rates on short-term government debt during the debt ceiling impasse, with some big investors saying they expect a premium in the future to compensate for the risk of new default threats. President Obama took the right path by refusing to negotiate with Republicans who, yet again, were holding the economy hostage to unacceptable demands. The challenge now is not only to undo the damage, but to put the nation on a path to more jobs, higher incomes and broad prosperity.
Posted on: Sun, 20 Oct 2013 08:29:01 +0000