What is the biggest threat to the US economy according to the folks managing investment portfolios? It’s not the threat of terrorist attack, inflation or protectionist trade policies — it’s the threat of “government policy missteps” according to this CNBC.com article.
“Government Policy Missteps” garnered more than a third of the participants’ votes as their biggest fears in the quarterly survey, ahead of the more than 15 percent who cited “Protectionism,” which is also strongly-tied to the actions of the Administration and Congress.
Many economist and business professionals have pointed to uncertainty in the marketplace as one reason the US economy is struggling to rebound. Businesses need a clear understanding of the rules and regulations that are going to be in the place in the short and medium term in order to successfully plan for growth. With uncertainty surrounding tax policy (the expiration of Bush tax cuts), health care policy (costs of implementation of Obamacare), energy policy (cap & tax legislation) and employment policy (card check), it’s little wonder that businesses are sitting on the sidelines.
The businesses know it, the investors know it. Regardless of the electoral outcome in November, one thing is clear, the economy needs certainty in the market in order to grow. The sooner these anti-business policies are shelved, the sooner recovery will happen.