The research firm lays the blame squarely at the foot of the fiscal cliff. If a solution is not negotiated in time to avoid tumbling off the cliff, some 70% of respondents think the U.S. will enter another period of recession.
The largest negative impacts on the U.S. investment climate are a “politically divided federal government” and the federal budget deficit. Some 69% of respondents say that both issues are “hurting [the U.S. investment climate] a lot.” Other major impacts are unemployment (67% say it is hurting a lot), the global economic slowdown (63%), the price of energy (50%) and the European debt crisis (46%).
The top priority for U.S. policy makers is job creation, according to 89% of respondents, followed by 82% who believe addressing the federal deficit and debt is a top priority.
The impasse over the debt ceiling in the summer of 2011 pushed the index to a reading of -45, so by comparison this month’s reading of -8 is far better. But, as Gallup notes, there is not much time left to avoid the spending cuts and tax hikes that will come if a resolution to the fiscal cliff is not reached. It is a pretty safe guess that optimism will fall further if the U.S. falls off the cliff.