If Congress and President Barack Obama were serious about wanting to stimulate the economy, the best thing they could do is end the uncertainty over taxes and spending. If you don't believe me, just listen to some local business leaders.
Members of The Times Board of Economists recently discussed the state of the economy, and almost everyone said they wished Washington would make a decision, one way or another, on spending, which translates to taxes.
Tim Roper, owner of Smith Motors Auto Group, said the auto industry needs more certainty from Washington to create additional demand for cars.
Josh Halpern, owner of Albert's Diamond Jewelers, said people were out shopping in December; "they were just not spending as much money."
Why? Washington. "Right now it's uncertainty," he said.
Consumers don't know whether their taxes will go up, and by how much, so they're holding back on purchases. Likewise, business leaders are holding back on investments, waiting to see how much of a hit they will take when the federal overspending problem is finally addressed.
You'll read more about this Sunday. But let's look at the political angle now.
"Hi, I'm Uncle Sam, and I'm a spendaholic."
Thus began our nation's road to recovery. Americans, including the politicians in D.C., have finally admitted to this addiction.
Now what? Not surprisingly, there's uncertainty.
U.S. Rep. Todd Rokita, R-Ind., tried to force Congress to cut spending somewhere else to account for the $50 billion in additional federal aid for Hurricane Sandy flood victims.
“I share the compassion that all Americans feel toward Hurricane Sandy’s victims," the Munster native said. "By reducing spending on less important priorities – just as every family would do in times of emergency – we can help the victims without passing on the cost of this tragedy to the children of tomorrow.”
The House approved the additional money despite Rokita's objection.
On Tuesday, U.S. Sen. Dan Coats said in a speech on the Senate floor, “Continuing with the status quo, governing via crisis, and failing to address our spending problem must be unacceptable.”
Is anyone listening?
Next up on the federal fiscal crisis list is additional acrimonious debate over the federal debt ceiling. The House voted 285-144 Wednesday to extend it until May 18. More uncertainty, more reason for consumers and businesses to limit their spending.
From 1990 to 2002, Congress mostly adhered to the pay-as-you-go principle. It didn't end the national debt, but it at least balanced the budget.
Congress needs that law again. When you're a drunk, you stop drinking. When you spend like a drunken sailor, you need to stop overspending. That much is for certain.
And for more certainty.
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