"The GOP’s Uncertainty Strategy Is Killing the Recovery"

The GOP’s Uncertainty Strategy Is Killing the Recovery

by Kirsten Powers at the Daily Beast

http://www.thedailybeast.com/articles/2013/10/18/the-gop-s-uncertainty-strategy-is-killing-the-recovery.html

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Back then, pleas for “economic certainty” were the Republican mantra as they fought Democratic attempts to return to Clinton-era tax rates for the wealthy. No more. Today, creating stomach-churning economic uncertainty is the GOP’s raison d’être. They were right the first time: Economic security and predictability are critical for economic growth. The lack of it during the last several years—courtesy of House Republicans—has done real damage to the economic recovery.


“The shutdown and the brinkmanship over the debt limit will cost the economy $20 billion in gross domestic product in the fourth quarter,” Mark Zandi, chief economist for Moody’s Analytics, told me in an interview yesterday. “This means GDP growth will be a half a percentage point less than it would have been otherwise.” Goldman Sachs chief economist Jan Hatzius expressed similar concerns in an Oct. 14 note citing the “rise in uncertainty” and predicted a “downside risk of around 0.5 points to our forecast of 2.5 percent real GDP growth in Q4.”



“The reason our economy can’t kick into higher gear is because of the uncertainty in [D.C]. Even if you like the changes, the process itself creates angst,” Zandi argued. “The predominant uncertainty is this brinkmanship [over the debt limit]. We need for Washington to get out of the way.”


The deal reached to end the shutdown did nothing to address the albatross of unpredictability. Congress merely agreed to fund the government for another three months, until Jan. 15. Then it will revisit the debt limit in February. It’s the Groundhog Day of governing.




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