Thursday, September 2, 2010

Insight into local economy woes

Nationally, the economy is growing slower than expected, and the local economy is no different.

I had the opportunity to talk with an owner of a business in the Susquehanna Valley recently, and his comments were enlightening. He said:

"I could really use one or two more employees. We are struggling to keep up (with our business). But with the new health care laws I am holding out for a while. We have no idea what the government will force us to do with this law."

I had always thought 2010 was the year the economy would start to slowly pick up. It appears it is getting better, but economic performance hasn't improved at the rate I was expecting. I must admit that I neglected to think of the burden that the changing laws has on the economic performance. With this massive health care bill and other 1000+ page bills being passed that our local congressman isn't even reading, firms are understandably cautious right now.

I would be curious to see a formal study on this - but my guess is that if there was no health care bill - our unemployment rate probably would be 0.2-0.6 percentage points lower.

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