Economic Growth in 2013: A Blend of Optimism with Realism
Like me, I’m sure most of you are relieved the “fiscal cliff” debate is behind us, at least for the moment. While Congress and President Obama still have plenty of work to do, I’m hopeful both political parties can work together on compromises that will begin to reduce the deficit and simultaneously stimulate economic growth.
What’s frustrating for me and for many Americans is that most of us recognize what has to be done. We need a balanced solution that includes new revenue and serious deficit cutting, with a look to the long-term economic vibrancy of our economy. We need tax reform and tax simplification, and we need to set national policies that incentivize private-sector workers, jumpstart new businesses, spur entrepreneurship and encourage innovation. If we can take steps toward realizing these goals, I believe we can see positive economic results in 2013.
Global Effect of U.S. Debt
Not all of us are so optimistic, of course. The world’s CFOs, controllers and other management accountants predict the U.S. debt will have at least some impact on their own operations and a weaker position for the United States in the long run, according to a recent survey of Chartered Global Management Accountant® designation holders. They are delaying hiring and spending in anticipation of a lower U.S. credit rating, higher U.S. interest rates and a weaker dollar down the road. Similarly, the latest AICPA CPA Outlook Index (4th quarter 2012) indicates that CPAs are not particularly hopeful about the nation’s economic future. According to the survey of CPAs who hold executive and senior management accounting roles in U.S. companies, only 21 percent said they are optimistic. And as an AICPA Insights® blog notes, many clients are also jittery about what all this uncertainty means for their businesses.
Signs of Improvement
Still, many signs of an economic recovery exist. Housing, a chief culprit of the recession, is showing sustained strength, as is the auto industry. Many companies are reporting solid earnings, which have been reflected in their stock prices. CPA firms, too, have successfully navigated through several years of economic uncertainty. According to the 2012 National MAP Survey sponsored by the AICPA Private Companies Practice Section in association with the Texas Society of CPAs, two-thirds of all CPA firms surveyed experienced at least some growth in client fees over the previous year.
Commitment to Solutions
I think the smart approach is to be optimistic but remain realistic, facing our challenges with workable solutions and an eye toward opportunities they present. At the AICPA, we will do our part by continuing to serve as an objective voice of fiscal responsibility and as an advocate for both the profession and the public interest with Congressmen and Senators on both sides of the aisle. The more than 80 new members of Congress offer a fresh opportunity to make our views known. We are particularly pleased to welcome two new CPAs to Congress: Patrick Murphy, a Democrat from Florida who also is the youngest member serving in the House of Representatives, and Tom Rice, a Republican from South Carolina.
While we are encouraged by many hopeful signs, the AICPA recognizes that America still faces significant financial challenges that need to be addressed to achieve financial stability. We are committed to being part of the answer by providing resources and expertise to the nation’s CPAs, to Congress and to the public.
Richard J. Caturano, CPA, CGMA, Chairman of the Board of Directors, American Institute of CPAs.
2013 growth image via Shutterstock