It’s time to fasten your seatbelts. At least that’s the opinion of Miles Nadal, CEO of advertising and marketing services holding company MDC Partners.
He was referring to the Congressional solution that takes effect at the start of 2013 to deal with the U.S. debt. It calls for sharp government spending cuts and tax increases that some economists predict would put the country into another recession. Nadal weighed in on the matter during an appearance on CNBC’s "Morning Joe" program Tuesday morning.
While Nadal believes "we're going over the cliff," he also qualified his remarks, indicating that Congress and The White House would come up with a fix early next year. And it’s essential that they do, he said. “The world needs a degree of predictability,” he said.
The current uncertainty, Nadal said, is prompting U.S. companies to forego hiring, capital expenditures, acquisitions and general business investments. And if the government doesn’t come up with a resolution soon, “we’re in for a tough period of time.”
Smaller companies, or what Nadal called the “engine of America,” are at particular risk. “We can’t afford for the machine to stop,” he said. “It’s tough enough [for them] to compete,” and the looming combination of spending cuts and taxes could “dampen the economy,” he said. He didn't use the "R" word, though.
If this year does come to a close without a resolution, said Nadal, bigger companies would have a somewhat easier time adopting, partly because much of their business is done outside the U.S.