Sept. 24 - What's keeping U.S. economists up at night? A semi-annual survey from the National Association of Business Economics says bond buying, debt building, and budget busting. Bobbi Rebell reports.
With a jobless rate still above 8 percent the economy is causing many restless nights. A new survey from the NABE- that's the National Association for Business Economics- found some surprising things keeping their members up at night. First of all: did the Fed make a mistake with QE3? Roughly 60 percent said the Fed should not do a third round of quantitative easing. Now, the survey was done in August- before they actually did make that decision. Wells Fargo global economist Jay Bryson, chaired the survey: SOUNDBITE: JAY BRYSON, GLOBAL ECONOMIST, WELLS FARGO, AND NABE DIRECTOR, (ENGLISH) SAYING: "Perhaps because they thought maybe: A, the economy didn't need it or B, maybe they were concerned about maybe some long run inflation implications of a third round of easing." Will Washington fall off the fiscal cliff? Over 85% of the survey respondents think that uncertainty about fiscal policy- the fiscal cliff- going forward is holding back the pace of the recovery. SOUNDBITE: JAY BRYSON, GLOBAL ECONOMIST, WELLS FARGO, AND NABE DIRECTOR, (ENGLISH) SAYING: "The way that works is that at least with businesses it makes them want to hold back with investments if they don't know where tax rates are going to be or where the economy is going to be." 90 percent want to see some combination of spending cuts and tax increases to cut the budget deficit. But less than half think the Bush-era tax rates should be extended. And does the euro zone have a future? The majority believe in 5 years, the European Union will be smaller. SOUNDBITE: JAY BRYSON, GLOBAL ECONOMIST, WELLS FARGO, AND NABE DIRECTOR, (ENGLISH) SAYING: "Some of these countries with the very, very high debt levels they are insolvent today and eventually they are going to have to leave the euro zone in order to grow their way back to prosperity. " Europe is likely to cause more restless night for some time. But the cure for the insomnia here in the U.S.- definitive decisions and actions in Washington, something that is likely to happen sometime after Congress comes back after the election. Bobbi Rebell, Reuters