After a long and hard-fought election cycle, American workers are facing yet another political problem: the fiscal cliff. Except this time we can’t vote to determine what the country does. For the most part, we can only wait to see what will happen.
There has been a great deal of discussion lately about the impending fiscal cliff our nation faces come the new year. Some people consider it a good step toward fiscal responsibility, many think it’s a bad way to go for the country. Others claim it’s an impending doomsday of austerity that will drag the country back into recession.
As a CFO, it’s important to pay attention to issues like the fiscal cliff. The financial health of the country plays a huge role in how a company handles its finances, investments, and opportunities. CFOs are definitely paying attention to the fiscal cliff.
GE CFO Hopes for an Agreement
According to Reuters, GE CFO Keith Sherin “said he would like to see lawmakers reach a solution to avoid a year-end fiscal cliff.” Most experts feel the same way as Sherin when it comes to the best outcome for the financial environment of the US.
Keith Sherin and other CFOs know that our markets and economy cannot take an immediate cut of $600 billion coupled with tax hikes overnight. As Scott Malone, the author of the article writes, “the financial crisis of 2008 and 2009 shook GE to its core.” GE and its upper management know the importance of a healthy economy, and how intricately tied it is to the health of corporations and businesses.
Sherin believes that lawmakers might not be able to reach a “full grand bargain,” but he hopes they can come to an agreement about a few issues to avoid the cliff and buy time to come together for a better deal. Ultimately it appears that many people, higher management, and corporations themselves will be playing it safe until signs of a deal become more prominent in the world of politics.
Sherin expects the US to come out of this problem without a crisis. If a crisis does occur, CFOs will find themselves operating in some increasingly confusing, turbulent, and unsettling financial situations as the US economy attempts to recover, if it can.
How do you think the fiscal cliff crisis should be solved?