U.S. manufacturing shrank last month for the first time in nearly 3 years, a sign analysts say suggests a slowdown for the nation’s economic recovery. Reuters reports that causes for the decline likely include a slowdown in China, the continued EuroZone debt crisis, as well as “uncertainty over domestic fiscal policy.” This uncertainty refers to the “fiscal cliff” of $4trillion in tax hikes and spending cuts due to kick in at the end of the year unless Congress acts to delay or offset them. The reluctance of Congress to address the issue before it all comes to a head in January has many private businesses and job creators in a holding pattern preventing further recovery. With the debt crisis of last summer still fresh in Americans’ minds, many fear that if a similar gridlock is not avoided by years end, we could be heading for economic catastrophe.
On “Real News” Tuesday the panel discussed the latest manufacturing numbers, as well as reported talks between Republican and Democratic congressional leaders about delaying automatic federal spending cuts until March. If a solution is not found by years end, is Congress legitimately all to blame? When does responsibility of the president come into play? Will anyone in Washington act to tackle the problem before elections this November? Dan Mitchell of the Cato Institute joined the show Tuesday to break down the situation: