Walt Laws−MacDonald | Show Me The Money!
We’ll be fine...
Published: Thursday, December 6, 2012
Updated: Friday, December 7, 2012 00:12
Before we all recede — if you haven’t already — into the usual pre−finals state of coffee−rage−depression−repeat, I’d like to give you all one last look at the outside world. As the semester draws to a close, the world seems a drastically different place from when we first arrived on campus, with wide eyes and skinny quads.
Europe has fixed itself — psych! We have a new president — psych! We finally have a fiscal cliff deal — psych! People have finally gotten over the whole “bias at Tufts/bias is stupid” debate — psych!
Alright, so maybe things haven’t changed as much as I thought. Still, the past few months deserve a recap, and hopefully I can give you some talking points for the holidays. We all have that one uncle who just loves to talk about economics. Someday I will be that uncle. And my nieces and nephews will love me for it. Psych!
First and foremost, the Fiscal Cliff. As I mentioned in a previous column: huge deal. Still, huge deal. As expected, Congress is using this as an opportunity not only to take shots at each other, but also to undermine any sort of confidence the American economy has mustered in the past few months. Way to go, Congress. Really nailing it with this one. I mean, maybe you can outdo the debt ceiling debacle.
But seriously. The Fiscal Cliff is incredibly important. If Congress cannot come up with an agreement — which, as a reminder, means that spending will decrease and tax rates will increase — it will not only curtail domestic growth, but also show that even when it is most needed, “bi−partisanship” is not a “thing.”
Do I have faith in Congress? Yes. The markets expect some sort of deal, and it appears that Congress really is making progress. If, however, we fall off the cliff, the road to recovery will be that much longer and treacherous. The deal doesn’t have to be perfect — and trust me, it won’t be — but for the sake of the economy and, more importantly, confidence in the economy, we need some sort of concrete plan.
Secondly, the world is not going to end. It just isn’t. Also, Dec. 21 is my first day of winter break, so that would be a total bummer.
So what’s the good news? Germany approved the most recent Greek debt deal just a few days ago, giving Greece’s economy nearly $60 billion in rescue loans. Greece is certainly not out of the woods yet — and I’m beginning to doubt that it ever will be — but the rest of the Eurozone is taking crucial steps to make sure it sticks around.
Everyone’s — and by that I mean the crazy people that like to wake up at 4 a.m. to buy a blender — favorite shopping day came off as a modest success, as Americans are back to spending freely again. Although sales were down about two percent from Black Friday last year, the number of shoppers hit an all−time high, as Americans seemed unaffected by the Fiscal Cliff talks. So I guess that’s a good thing.
Most importantly, the economy seems to have stabilized in the past six months. Volatility has dipped to half of its 2011 levels, and unemployment has dropped below eight percent. We no longer have to worry about who will lead the country next year, and — once we’re done not falling off the cliff — Congress will have an opportunity to actually get something done... I hope.
So after finals, relax Jumbos. Catch up on some sleep, maybe work on your resume. The world is your oyster — for the next four weeks.
Walt Laws-MacDonald is a sophomore majoring in quantitative economics. He can be reached at Walt.Laws_MacDonald@tufts.edu.