How Washington Is Killing Jobs

The conventional wisdom is that it's all a bluff. Politicians might be crass and even corrupt, but they're not self-destructive. Except now, Americans aren't so sure. Dire predictions about what could happen if there's no debt deal in Washington are beginning to impact consumer confidence and weigh heavily on the minds of business leaders. Ryan Sweet of Moody's Economy.com points out that confidence surveys show Americans are getting gloomier, even as fundamentals such as debt levels and spending have been improving. "The catalyst for the decline … may be related to the drumbeat of media attention to the debt ceiling and the doomsday scenario if it's not raised," he writes. "If the debt-ceiling issue is not resolved soon, declines in sentiment will intensify."


That affects the job market because business leaders closely follow the attitudes of consumers, since that's where much of their business comes from. And if consumers are spooked, businesses are very unlikely to bring on workers they may have to let go in a few months. The latest data show that companies have even stopped hiring temporary workers, who they usually bring on before hiring more full-timers.