Morgan Stanley Chief U.S. Economist Vincent Reinhart detailed the potential risks to an already strained U.S. economy, in a Tuesday interview on CNBC:
REINHART: I think you're exactly right. The issue is essentially we went through a severe financial crisis. Economies that go through a severe financial crisis leave unfinished business, they grow a little bit slower for a long time after the crisis. And what that means is we're essentially flying the plane slower and closer to the ground and therefore more vulnerable to wind sheer. So I think you're right that we have to worry more about Europe, we have to worry about the significant fiscal consolidation that comes absent legislation on Dec. 31. Those are all risk factors that if we were growing faster, we'd be more resilient.
FANNING: The other thing I think about is about 48 percent of our customer base makes $40,000 or less. Those people make hard decisions every day for every dollar they spend. When I think about kind of the cost of overreaching regulation and the cost of government and the future cost of the federal deficit, what do we say to those people? How do we have the courage to act now?
REINHART: Part of the problem of having large deficits and a big deficit is we're less resilient. We don't have the resources to buffer against adverse shocks. We also don't get the chance to invest in infrastructure that could have a big payoff. So part of the answer is to tell those people the election should be contested on fiscal policy issues. Every four years we say this is an important election, this time it probably true. This is our chance to litigate the issue: How big do we want the government to be? What do we want for tax policy?