Is Debt Ceiling Deal Good for Business?

John G. Swanson
August 2, 2011
THE TALK... | Markets & Trends

"The National Association of Home Builders appreciates the hard work by the White House and Republican and Democratic congressional leaders to craft a bipartisan compromise to resolve the debt ceiling crisis,” said Bob Nielsen, a Nevada home builder and NAHB chairman, in a statement this week. “It will help to put our nation's fiscal house in order and provide greater certainty to the business community so they can start hiring again and get our economy on firmer footing.”

That’s about as positive an assessment of the past few days in Washington that I’ve seen. Generally, it seems those in the center are most supportive of the debt ceiling agreement passed by Congress and signed by President Obama. Those further to the left or right are much less enthusiastic.

How about you? Are you satisfied with the agreement? Relieved? Angry? Post a comment to share your thoughts. Meanwhile, we’ll use our poll this week to see how many of you agree with NAHB’s chair and believe the agreement will be good for business moving forward.

Survey Results as 08/08/2011:

 

The debt ceiling agreement:

May have helped to avoid an economic meltdown, but won't help business improve much this year.

  

 

66%

Will have a negative impact on business this year.

  

 

31%

Should improve the business environment for the rest of the year.

  

 

4%

Wall Street seems to be catching up with the window and door industry. The beginning of this year saw nervous hope that the worst was over and things will start picking up with regards to the economy in general and our markets specifically.  As the year has progressed, that hope has faded. More and more of window and door executives I speak with are saying they don't see the improvement coming this year.

This was evident long before the debt deal was reached.  Now that we've passed that hurdle, our poll suggests our industry is probably relieved that another calamity was avoided, but few see new reasons for hope.  We're still skeptical business will improve in 2011.

The downgrade of America's credit rating didn't help, but markets fell last week as Wall Street too seemed to recognize that with the drama of the debt deal passed, the economy isn't likely to get that much better for the rest of the year.  Personally, I find it hard to say what it all means. I hope the small minority of our poll takers hoping business might improve is right, but I'm content for the moment to be with the majority who are grateful things didn't get much worse.   

Comments

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John,

 Even our government must learn to live within its means. In the long run , we are all better off to not be indebt to foriegn interests, either friend or foe. When the government is not indebt to the trillions , then it (the government) can do the job it should be doing . That is to support our infastructure and military. Leave the rest to the citizens.

 I do not think our government will reduce the debt. It is not an interest that anyone is ready to be honest about. It will take a major crash of the markets or the government itself to get things started in the right direction.

 For now I am just glad to have a job (make that two jobs ) to make the finances work.

It's like paying off a credit card with another credit card but making empty promises to ourselves that we will cut spending over the next 10 years.  It doesn't work, we need to cut spending TODAY!  We are heading down the same path as Britain.  They were the world powerhouse until WWII, China may become the next world power if we don't straighten up.  We need strong leaders that talk about making cuts today and not 10 years from now that everyone will forget.  We owe this to our kids and grand kids! 

My problem with the whole deal is that the $2.4 trillion in cuts are only being cut from expected spending over 10 years and not lowering the amount being spent.  This deal is not a fix by a long shot.  It will actually add $7-8 trillion to our debt over the next 10 years.  Wayne, I think you hit the nail on the head that no one can comprehend the numbers unless they are attached to an election poll.  Until our government understands, like most American households do, that spending more than you bring in is a very bad thing, our ecomomy will continue to decline until there is nothing left for them to spend.

I guess I'm at the point in my life that if the media is saying something I usually take the opposite view.  I'm not sure how anyone can be negative about the deal that was reached.  Was it enough, no, was it the first time in the history of raising the debt cieling dozens of times before over the last four or five decades that a commensurate cut in spending was agreed to- yes! 

How can that possibly be a negative.  I just looked at your poll and cannot comprehend how getting some, albeit not enough, cuts in spening could hurt our economy.  I think it is because no body, not even the politiciancs can comprehend the numbers they are throwing out - can anyone really understand a billion dollars, how about a trillion dollars, sorry make that $14 Trillion dollars. . .