The CEO of the giant bond investment firm Pimco, Mohamed El-Erian, stated that the debt ceiling deal that Obama and Congress have settled on “does nothing to restore household and corporate confidence. So unemployment will be higher than it would have been otherwise, growth will be lower than it would be otherwise, and inequality will be worse than it would be otherwise.” See the full interview.
Yesterday's news also brought word of China's massive increases in research and development spending. While we should be happy for China's growth, it should also remind us of the importance of investing in infrastructure, education, and research now to ensure our continued prosperity for decades to come. This is a dangerous time to be pulling back from key investments that give our country its competitive advantage.