Fiscal Uncertainty Impacting Businesses
With the fiscal cliff looming and political parties at loggerheads, the indecision and uncertainty is having a negative impact on businesses and American workers.
There was good news politically for President Obama as the unemployment rate fell below 8 percent, however the decrease is a consequence of workers leaving the workforce, which does not bode as well for the economy as a whole.
Jim Bullard, the president of the St. Louis Federal Reserve, says that the debt carried by the US remains a problem and that the burden will not ease by inflation.
“A partial default today through higher inflation would be paid for via higher inflation premiums in future borrowing. Creditors would want to protect themselves against an unpredictable central bank,” said Bullard, according to CNBC.
Spain Undecided on Bailout
A bailout of Spain may not be a foregone conclusion and while Spain ponders its decision regarding whether to take assistance, the European Central Bank has opted to keep rates steady.