Jared Bernstein worries that uncertainty about the economic future is holding growth back:
Reading Fed speeches this week, looking at the upcoming fiscal slope and debt ceiling fights, watching Europe bumble along, and just trying to read the economic tea leaves—“uncertainty” is a pretty good word to describe the way a lot of people are probably thinking and feeling about the current economy right now. Picture a defense contractor whose short-term future rests on the outcome of the automatic spending cuts, half of which come from defense spending. Or exporters who sell stuff to Europe. Or retailers who don’t know whether middle-class paychecks will take a hit on Jan 1 when the payroll tax break ends and middle-class taxes increase (which could show up in wage withholding tables right away).
Drum distinguishes between “regulatory” and “economic” uncertainty:
Conservatives complain about the former regularly, but there’s simply no evidence that regulatory uncertainty is, or ever has been, a significant issue for American businesses. In fact, all the evidence says exactly the opposite. Economic uncertainty is a whole different thing, and there’s really nothing here to come around on. That’s been holding back investment and hiring for a long time, and it’s always been one of the strongest arguments in favor of further fiscal and monetary stimulus.