As numerous attempts to hammer out a compromise deal that would raise the federal government’s debt ceiling continue to be fruitless, public confidence in Congress and the President’s ability to get a deal done continues to wane as the August 2 deadline closes in.
That’s when economists says the federal government will hit its debt limit and risks going into default. Dr. Bill Hauk, an economics professor at the Darla Moore School of Business at South Carolina, predicts that an eleventh hour deal will be struck prior to the deadline. Hauk says what he is absolutely sure of is that with the federal government’s $14.3 trillion dollar debt, balancing the nation’s budget will require much more than a quick fix.
Democrats argue than any deal must include a combination of debt reduction and growth in revenues stemming from the closing of tax loopholes and getting rid of major corporate tax subsidies. Republicans are seeking significant reduction in the nation’s debt, with no significant growth in revenues. Republicans say the steps Democrats want to take to raise revenue amounts to tax increases. Hauk says statements by both parties contain elements of the truth.
South Carolina’s jobless rate jumped half a percentage point in June to 10.5 percent. The state’s unemployment numbers have been consistently higher than the national rate, which was 9.2 percent in June. In May, South Carolina reversed a four-month downward trend, with the jobless rate rising slightly to 10 percent. Hauk says a number of businesses will not being investing in expansion and creating more job opportunities until confidence growths in the long-term direction of the economy and the continued lack of confidence is due in part to the failure by Washington politicians to strike a deal to raise the debt ceiling.