As an addendum to yesterday's post on investor confidence in the United States, it's worth noting this recent Gallup survey, in which they gave investors a list of possible situations that could affect the investment climate, and asked which were hurting or helping the United States. Of the choices, deficits and unemployment ranked the highest:
Obviously, investors aren't the definitive arbiters of what will help or hurt the economy. That said, for those preoccupied with the potential economic cost of debt, this should be (another) reminder that high unemployment is as much a drag on growth as high deficits. Indeed, it might be a greater drag; after all, deficits are likely to fall as the economy recovers from the recession and financial crisis. Unemployment isn't as mechanical, and there's a strong chance that we'll face persistently high joblessness, which -- like high debt -- is disastrous for future economic growth.
