Monday, December 5, 2011

Debt Ceiling Debacle Really Did Hurt

Right after the contentious debate over raising the debt ceiling last summer, I had the feeling that the recklessness of that debate had helped slam the brakes on the recovery underway in the U.S. economy. I know I personally felt less confidence about the direction of our nation, given the willingness, even eagerness, of so many Republicans to gamble with our nation's financial stability for the sake of politics.

Now there's a little bit of evidence to back up how I felt. In a column in the Sunday Detroit Free Press, Tom Walsh wrote of the impact the debate had on hiring in the view of Carl Camden, the CEO of Kelly Services.

Hiring of temporary workers was up 10 percent in the first half of 2011 compared to the previous year. But then came the debt ceiling debate an the Standard and Poor's downgrade of the U.S. credit rating. By August, the growth had melted away.

Walsh quoted Camden as saying:

"'That's the time of year when Kelly's part-time hiring usually goes into a cyclical upswing. It had been true for 60 years, but this time it was not true,' Camden told (Walsh). 'We moved sideways instead of seeing a cyclical boost. A lot of employment momentum was lost.'"

Walsh didn't blame Republicans directly, referring to partisan squabbling. But Camden makes it pretty clear what he meant.

"It wasn't the debate itself, it was the tone of the debate," Camden said. "People actually believed they might do something crazy, or crazed -- like saying it's OK for the U.S. government to default on its debt."

It wasn't President Obama or Democrats advocating a default on the debt. It was the party that supposedly knows so much about the economy that was engaging in the "crazed" talk about defaulting. Maybe people like Camden will have that in the back of their minds when the 2012 campaign heats up.

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