Dr. J mentions, in reference to companies moving employees to part-time statuses to ease their insurance costs, as something foreseen and he, nor any other Gormogon, was surprised to see it happen. It is disheartening, which is one of the reasons why so many conservatives are befuddled by the election outcome. Keep in mind, there are other shoes to drop: it is likely that the lame-duck Congress will kick the sequestration can down the road until the next Congress is seated. This introduces uncertainty to which the markets don’t react well. It is also likely that some amount of cuts to federal spending, including the defense department, will be happening in the near future. The fear is, of course, that these cuts will be more like haircuts – “take a bit off the top” – than surgical cuts of removing the waste and excess which mind you, does exist. This will set off a round of layoffs, early buyouts, etc. among federal contractors both large and small – some of which has started. Liberals are starting up their defensive talking points. In addition to those cited by Dr. J, we can point at the White House memo regarding their support of taxpayer funded assistance to companies who bypass the Warn Act. Furthermore, liberals will claim that it wasn’t required as specific employees impacted by as of yet uncertain cuts could not be identified. While true, what the liberal isn’t saying is how President Obama is going to overcome these job losses.
The next shoe is the looming tax rate increases supported by President Obama. The taxes will hit across the board and will reduce the amount of free capital available to all for investment purposes. Less free capital raises two critical issues: personal savings rates and investments. If people have less free capital, it is likely that they will reduce the amount they are saving – either for retirement (401k plans, for example) or for more immediate needs or both. Reducing 401k investment amounts will reduce the amount of money going into the market at a time when baby boomers are already removing money from the market in order to live off of the remaining capital in their retirement. Less savings means more people who are vulnerable to catastrophic financial circumstances. The other leg of this is the investment side where less investment capital means less money coming into bonds, stocks, and so forth. That translates into slower growth for companies and shallower pockets for municipalities.
So the liberals can cite whatever study they want but when companies start reacting as they need to these impending changes, they cannot raise the cry against the businesses. It was known and said well before and denounced by these same liberals. So live with what you hath wrought. And when the economy gets worse, and make no mistake it has the serious potential to do so, make no mistake, it will be a result of 4+ years of Obama and 6+ years of a Democrat Senate. The only remaining question will be whether the opposition can effectively communicate that message – the other issues will be window dressings.