DEBT CEILING: 'WE DODGED BULLET,' BUT ...

posted by Michael Chihak

A top Arizona economist says the federal debt-ceiling issues that were temporarily settled this week may have contributed to a continuance of the weak economic recovery.

"Bottom line: We dodged a bullet," Jim Rounds said in an e-mail. Rounds is economist and senior vice president at Elliott D. Pollack & Co. in Scottsdale. He tracks Arizona's and the nation's economic indicators to help businesses set their plans and strategies.

"Shocks like the debt-ceiling issue have more of an impact when the economy is weak," Rounds said in his e-mail. "While a resolution was agreed upon, there were still some psychological impacts in the economy. Businesses became a bit more scared to invest and consumers became a bit more scared to spend."

"This may have set us back a good three months to half of a year in the recovery," he continued. "But, the broad array of economic data suggests no 'double dip', just a continued really weak recovery."

On Friday's Arizona Week, we will look at the broader economic implications of the debt-ceiling issue for Arizona, by speaking with a business and entrepreneurial specialist from the Thunderbird School for Global Management in Phoenix and with other economic and financial experts.