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Last week my teenage daughter and I visited the Magic Kingdom in Orlando. The Haunted Mansion? Really fun, but not very scary. Space Mountain? Very good, but in comparison with most roller coasters also not very scary. That dude inside creepy Donald Duck costume who kept hugging my daughter even with I finished utilizing the picture? OK, that has been a little scary.
But not as scary as the economy. Now it is going on five full years since we had a “good” economy. And, just by a lot of the data, we’ve still got a considerable ways to go. Regardless of what positive news we hear it’s typically offset by something unsettling. Small enterprises know this. And we’re scared. Which explains why we’re still not hiring yet still not overly optimistic.
Exactly what are we so scared about? I could name 8 things right off the bat.
#1. Gross Domestic Product
Gross Domestic Product was recently revised upwards for the fourth quarter and everyone said that was nice thing about it. But can many of us take a breather? That’s like saying the wait for Stitch’s Wild Ride is “only” Thirty minutes. The attraction still sucks. First off GDP was 3% at the conclusion of 2011 which is projected to be about the same for 2012. Meanwhile China just revised their GDP downward to 7.5%. What a bunch of show-offs. An excellent growth rate will be about 5-6%. If my business were only growing at a 3% rate I wouldn’t be so thrilled over it. Wait, five-years since the recession and my opportunity is still only growing in a 3% rate, which probably explains why I’m not really so thrilled about the economy at this time.
#2. Debt And Deficits
Currently our national debt stands near $15 trillion which can be about equal to the size of our entire economy (GDP can be about $15 trillion), along with the amount I allocated to a half day admittance to the Magic Kingdom. We’ve not had a 1:1 ratio of debt to output since WWII. In Europe, countries such as Greece, Italy, and Portugal have higher ratios and that’s after economically terrible situations that have been happening for many years. This is why I avoided Epcot altogether. Who can watch such suffering? Even Fed Chairman Bernanke said we were heading towards a “massive fiscal cliff”…and he is not talking about Splash Mountain either. Worse yet I have to worry about budgeting for the roof repair, fortunately Houston roofing wasn’t too expensive.
To have deficits manageable small business owners realize that we’re looking at a combination of future tax increases and/or significant cuts in spending. We’re already looking at significant tax increases being released 2013 since the effects of healthcare reform get ready. And more cuts in defense, construction or other government spending programs will require money away from those small businesses that rely on those industries. The choice is to keep spending, which can be even less palatable. This m