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Lindsey Piegza, FTN Financial economist, on why she believes tough questions need to be asked of the middle class in order to solve the fiscal cliff c...
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SA is even give a compromise is reached on the fiscal cliff -- that's a big if serious problems with the economy will remain and it's time to -- the tough questions about.
The middle -- joining us now Lindsay picks up economist with FT and financial NC as always thank you for being here but you say that.
Businesses and consumers are gonna face some harsh realities next year regardless of what Washington does on the fiscal cliff -- -- those realities play.
You know it is right -- -- very much focused on getting a compromise done but even if we get the president's plan even if we get the Republicans plan.
It's very likely that that -- growth down to under 1% for the first half of the year so it's a very dismal outlook regardless of whether -- -- we do actually come to compromise.
Now that's a much more positive outlook and falling off the cliff outright it still it doesn't set us up for long term growth.
Plus neither one of these proposals really asked the tough questions of the middle class saying -- long term.
We want to take on a bigger tax burden or do we wanna cut these social programs.
-- right now the conversation to me seems very disingenuous.
We're talking about a hundred trillion unfunded liabilities -- were arguing over 800 billion in tax increases I'm just 2% population -- Seven how this plays out because we're not hearing any discussions about entitlements Nolan wants even touch raising the retirement rate at which I don't understand why to me that is so simple.
All we're talking about -- tax we're not talking about spending and -- see them Republicans.
Dare I -- -- to just get this done.
You know -- bet that's a really difficult question because I think right now there's three clear scenarios we go over the cliff.
We kicked the can down the road -- we get some compilations some sort of compromise of spending your tax increases but again.
What that does -- senate suffered yet another conversations but I twelve months from now so really doesn't get us up further along and where we need to be getting this country.
Back onto a long term path to prosperity you know being -- percent many analysts say -- the market is already priced it would going over the cliff identified by is -- look at really prepared for that.
I don't think so I think right now the market is anticipating some sort of compromise which will be.
I didn't.
Less than favorable growth but not necessarily recession that we would go into if we saw that full 607 billion come -- -- the economy.
Well we're already seeing is that business says we're anticipating that flick to anticipating the compromise and parity on the sidelines right they're sitting on -- And billions of dollars that could be put to work but they're hesitant to invest that in terms of structures equipment or additional employees as we saw on this morning's report.
Consumer confidence was down short -- that could.
Is the consumer kind of lead to the party is for while we saw the consumer out there shopping.
-- -- Right now the senate may be they're -- that this could really be a big issue we'll businesses -- certainly gonna respond first because when they're making their decisions this is a 2510 year outlook.
The consumer can -- change their spending patterns really at last minute noticed right so as we come closer and closer to the fiscal -- now the consumers saying.
Wait a minute I'm hearing reports that my taxes may go up additional 5101000 dollars a year.
I -- -- better -- tempering my spending now so we're finally starting to see the consumer react.
And I think in good parts -- that's it was it would that drove that declining consumer confidence.
Looking at the jobs report.
Obviously headline numbers -- we had a job some lethal -- -- unemployment rates down to -- -- low.
But -- -- take on this well it you know it.
This is one of those reports for the headline doesn't tell the entire story short.
-- the first reaction was this is a great report double the consensus forecast.
But remember we only beat expectations because they were so tempered because we anticipated.
Such a negative effect from sandy.
But going through different sectors aside from construction it really appears that this is a clean report.
Really telling us what the underlying organic trend in the labor market is which says that we're continuing to lose momentum.
And from those initial very impressive jobs report at beginning of certainly say that the Fed will not be satisfied with this kind of growth so what does that mean more money -- and right now -- it -- -- 200 to 250000.
Jobs on a monthly basis just to cover demographic change.
So we're talking an average of a 130000.
Still very much sort of where we need to be.
So this keeps the conversation very similar the Fed in fact we may see them ramp up monthly purchases.
Rudy at a time I could Lindsay by the -- -- to see the bears in the -- has entered who's gonna win I think the -- don't business.
Yeah she's old bias sides and depicts an economist at FTN financial thank you so my thanks very much -- upgrade to senators and England kept happening to consumer cold.
