Sunday, April 15, 2012

Obama's Fiscal Exploding Cigar

The Washington Post calls it Obama's "taxmageddon." And the private sector is hoarding cash, rather than invest it, because of Obama's "perfect fiscal storm."
“It’s a fiscal perfect storm,” said Sean O’Keefe, the former Pentagon comptroller and NASA administrator who is now CEO of EADS North America, a major commercial aerospace company that does some Pentagon work. His recommendation: “suspend investment...the only productive course would be to stand back and see ultimately where the breakage occurs.”

Several defense and industry officials, huddling at a conference sponsored by the Center for Strategic & International Studies, revealed that business are worried that Washington will dodge decisions on the budget until after the November election, resulting in the expiration of the Bush tax cuts and an across-the-board cut called for in last year’s “sequestration” deal, which could result in cuts of $1.2 trillion over 10 years. They are also worried about Obama's assault on Wall Street and corporate America as well as the wealthy.

When adding in another debt limit fight and the uncertainty of pending federal programs, said industry leaders, it makes sense to sit on the sidelines until the dust settles.

“Companies are holding off investment decisions pending the outcome of this perfect storm period when all these fiscal challenges are timed to occur,” said O’Keefe, who also served as former President George W. Bush’s deputy budget chief.


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