In a report over at Bloomburg, Jim Tisch gets right to the heart of spending. He surmises:
[E]conomic growth will remain sluggish in part because executives lack confidence in the Obama administration’s policies….President Barack Obama’s health care reform, financial regulation and moratorium on offshore drilling are keeping businesses from spending money to expand….“The thing that business people don’t like is uncertainty. Part of the problem is that business has very little confidence in what’s been going on and very little visibility.”
I’ve been constantly saying that consumptive spending is not enough to have any real stimulus effect; it is investment spending that will make any noticeable difference. But businesses are plagued by a precarious economy, and therefore are choosing to hold off on projects and expansion that would normally pump revenue into the economy. As a result, the growth and recovery that we need is inert.