High-profile city guest on shutdown, debt ceiling
On a dramatic day for the future of the nation and the direction of the economy, High Point hosted one of the top economists in the nation to discuss the implications of the government shutdown and possible default on the country’s debts.
To illustrate his point, Wells Fargo Senior Chief Economist Mark Vitner made an analogy about traveling by car in fog.
“You can drive in fog, but you can’t drive that fast,” Vitner said during a breakfast speech Wednesday morning to an audience downtown.
Just like a driver reduces speed negotiating a fog-engulfed highway, so businesses have limited their expansion and hiring because of uncertainty clouding the nation’s capital, Vitner said. Economic growth has been muffled because the recurring disputes between Republicans and Democrats don’t give employers confidence for long-term planning, he said.
“This crisis-to-crisis mentality in Washington is taking a toll on the economy,” said Vitner, a frequent analyst on CNBC and who’s quoted regularly by national business publications.
President Barack Obama and Congress have battled since the first of this month to reopen most sectors of the federal government and once again raise the nation’s debt ceiling to head off a default on the country’s debts. A handful of politicians have floated the idea that an unprecedented default wouldn’t result in the calamity that economists predict, but Vitner told local business leaders that a “default would be worse than most people think.”
A default not only would have dire short- and long-term economic implications, but taint the role of the United States as a stable haven globally for investing, Vitner said.
The uncertainty over politics in Washington, combined with concerns about how the implementation of the Affordable Care Act will impact small businesses, contributes to economic growth levels remaining mediocre, he said. The annual U.S. economic growth since the onset of the Great Recession five years ago remains two-thirds of the level before the downturn.
The appearance by a high-profile economist in High Point during the height of the crisis in Washington came about, in part, through the chance of the calendar. Vitner’s visit to High Point was scheduled at least six weeks ago, said Susan Brown, market president in High Point for Wells Fargo.
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