While everyone is calculating the real potential cost of failure to lift the debt ceiling, and a potential US debt downgrade, few are keeping their ear to the rail and listening to those reactions that are occurring not on Wall Street, but on Main Street.
Confidence, that key ingredient in any recovery, is where the destruction is really occurring. The phone calls received in our offices telegraph this issue… Should I keep more money in a liquid account? Should I withdraw cash if the ATM’s don’t work? Should I cancel the contract on the purchase of my new home? Should I stretch out my payables? Will my credit line be available?
While none of these concerns should materialize, our leaders in Washington should not be happy that their constituents are asking these questions. They have consciously put their partisan bickering and ideology in front of the need to act responsibly and do what is right to heal economy and the nation. The damage to the confidence of the small business owner and entrepreneur is immeasurable…
While everyone is focused on whether the Govt will be able to make it’s payments or not, it is the damage to the economy’s engine of growth that can not be simply fixed by a legislative act or agreement. The damage will be somewhat permanent, and will take years to undo.
Fundamentally, I find the entire process flawed with previous spending being potentially constrained by a cap voted on in the future. The fact that our legislators would use this flaw to hold the nation hostage is appalling.
In the end, I am confident that we will come to a compromise, but at what cost to our fragile economy.