Still Fiddling While the 'Fiscal Cliff' Gets Closer: Bartiromo
With the Republican National Convention kicking off in less than two weeks, and Mitt Romney's pick for vice president — Paul Ryan — figuring prominently, there is a clear message to the American people that this ticket will keep a sustainable budget and meaningful debt cutting at the top of the agenda. (Related Link: Chris Christie to Deliver GOP Convention Keynote.)
In other words, the national conversation in this election will finally move back to what we should be talking about — reining in debt and creating jobs.
The "fiscal cliff" is fast approaching. But well before the Jan. 2 deadline — when without a compromise every working American will get a tax hike and hundreds of billions of dollars in government spending programs will expire — the pink slips will be going out at many companies not sure their government contracts will continue.
Leaders of defense, transportation, and health care companies will have to notify employees that their jobs will be cut because of the uncertainty in the next two months.
This so-called "fiscal cliff" has become the hot button issue from Wall Street to Main Street with good reason. Once these programs expire, Americans will be faced with the biggest tax increase since World War II, with massive layoffs likely across the nation. Many economists say this would catapult the U.S. economy back into a deep recession, and others forecast an even worse scenario — depression-like times. (Related Link: How Much the Fiscal Cliff Would Cost You.)
Federal Reserve Chairman Ben Bernanke has said that if it's not addressed, the risk of a recession will grow in 2013. And in a recent survey of leading economists, nearly 90 percent say just the worry that D.C. won't get it's act together will likely cause businesses to spend and invest less. That means they will hire less. Talk about a self-inflicted wound!
Congress of course is STILL in the midst of its five-week vacation, (putting even Europe to shame on that front) without agreeing on any extension of these plans. (Related Link: Fiscal Cliff Looms Large as Congress Leaves Town.)
So far the markets are betting on a resolution after the election and have been rallying on coordinated central bank stimulus globally, but many argue that the Fed is close to being out of bullets, and what it does have left will be less and less effective.
So while the Fed continues to bail out the White House and Congress by giving them a pass to ignore the fiscal cliff, it is already impacting business decision making and sentiment. In the second quarter reporting season, companies are citing the impact of the "fiscal cliff" uncertainty in their earnings. (Related Link: CNBC's Earnings Central.)
Above all else, the market hates uncertainty. Thanks to the White House and our Congress, uncertainty is the only certain thing. As President Theodore Roosevelt once said, "In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing."
Leave it to Washington to make the worst decision time and again. And we all pay the price.
-By CNBC's Maria Bartiromo