(Washington Times) Worries about the federal government’s “fiscal cliff” are taking their toll on the economy well ahead of the year-end deadline, which analysts say is looking like it may be more damaging in the run-up than in the reality.
Businesses frequently cite uncertainty about what will happen with $600 billion in government spending cuts and expiring tax breaks scheduled to start taking effect Jan. 1 as their reason for refraining from hiring or spending on facilities and equipment. Reports make it clear that this uncertainty contributed significantly to the economic slowdown in the spring and summer as well as to a continuing slump in manufacturing.
Activity at the nation’s factories — already depressed by the recession in Europe and slowdown in China, two of the biggest U.S. export markets — went into reverse during the summer as U.S. businesses put orders on hold.
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