Wells Fargo Strategist: Simpson Bowles Is Best Way Out of Fiscal Dilemma
A Wells Fargo market strategist joined the many business leaders supporting the Simpson-Bowles plan. Ron Florence, the Managing Director of Investment Strategy for Wells Fargo, commented on the damage that the threatening fiscal cliff is having on the economy and on the struggle for compromise.
It’s encouraging that we’re moving in the right direction, but very discouraging the velocity of the recovery is not enough to fix the problem. The number one priority is clarity, once the rules are set, capitalism can adjust to it.
What’s interesting about the fiscal cliff is that in November and December, this president will still be president and this Congress will still be in office. Yet there is no realistic bipartisan compromise negotiation going on.
While frustrated by the speed of the negotiations, Florence said that policymakers had a good model to follow: Simpson-Bowles.
Simpson-Bowles is my utopia — it’s an honest acknowledgement of spending and revenue. If enacted, we would see a dramatic change in economic activity and in the mood of the capital markets.
The uncertainty created by the fiscal cliff is surely having negative effect on the economy. With the White House beginning to consult on the sequester this week, businesses and agencies will need planning, if they haven't been already, for this very real possibility. A bipartisan debt reduction plan could remove the fiscal cliff as well as giving households and businesses confidence that our fiscal path is secure.