A CEO manifesto on debt and deficit
Republican U.S. presidential candidate Mitt Romney speaks during a campaign rally as a national debt clock runs in the background on September 26, 2012 in Toledo, Ohio. CEOs from across the country are asking Congress to figure out how to decrease the deficit. But how pure are their intentions?
When was the last time a CEO had a manifesto anyway?
Felix Salmon, finance blogger at Reuters and regular guest on our Weekly Wrap segment, says that's a good question.
A whole host of CEOs from companies like Delta Air Lines, Time Warner Cable and Macy's have signed onto a campaign called "Fix the Deficit." It asks Congress to come up with a bi-partisan solution to reduce the federal deficit.
But Salmon says the U.S. federal deficit is high but not unmanageable. He says we're already moving in the right direction because debt in the United States -- both public debt of the government and private debt of consumers and businesses alike -- has dropped since the financial crisis. Salmon says one reason the debt is so high is because of the actions of businesses.
"The companies...they are borrowing less," he says. "What that means is there's less economic activity going on and the goverment is stepping in with its own borrowing to try and keep the economy moving...what [the corporate sector] should be doing is taking advantage of these low interest rates to borrow money and invest in the economy. And they're not doing that."
Salmon says the CEOs might have alterior motives -- they're hoping a bi-partisan approach to reducing the deficit could ultimately result in lower corporate taxes.
But Salmon doesn't just criticize CEOs. He says everyone -- both political parties, candidates, moderators and the public -- should be more concerned with bringing down unemployment than the deficit.