CreditUpdates.com on Business Spending Trends and the Impact on the Economy

CreditUpdates.com EconomyA number of recent reports have indicated that capital spending has dropped at a rate not seen since 2009, which should be a cause for major concern considering the fact that the decrease in spending by businesses was a significant part of the reason for the stalled economy of the most recent recession. Currently down 6.2 percent over the past year — due in part to the 2.1 percent decline occurring during the last quarter of 2015 — the drop in business spending comes at a time when consumer spending is up by a fairly large margin.

Perhaps an analysis performed by a company like CreditUpdates.com would provide some insight into the factors causing this drop, as experts across a variety of sectors have chalked up the decline to everything from the uncertainty associated with the upcoming presidential election to nothing more than a lag between the period of market recovery and a return to the hiring and investment practices reflecting that recovery.

In the same way that the sensible utilization of available credit can help improve a company’s credit rating, so too can capital spending assist in lifting the economy on a massive scale. While the Federal Reserve’s interest rates and policies are certainly having an impact on the decision-making process being utilized by business leaders, the benefits associated with a return to spending appear likely to outweigh the drawbacks.

 


Thawed Relations With Cuba Bound to Bring About Positive and Long-Term Economic Change

Much has been made of the long-overdue thawing of relations between the United States and Cuba, and the matter has remained a somewhat surprisingly contentious issue among parties on both sides. This is going to be a long process of normalization due to the resistance that is still apparent on each side, but the economic changes that should come from all of this ought to prove overwhelmingly positive in the long run. It should be plainly evident, however, that the majority of people on both sides of this issue see an economic opportunity in Cuba that should prove mutually beneficial for both nations. The issue is how to optimize these opportunities in a way that equally satisfies the leaders of both the United States and Cuba.

The trade embargo has had an undeniable effect on the economy of Cuba, but the point of the embargo was to stimulate the type of political change that would push Fidel Castro and his regime out of power. The embargo and the other financial sanctions imposed upon Cuba have not been able to accomplish this despite the effects on Cuba’s diplomatic relations with other countries, and the political impact on the perception of the United States in Latin American countries has been too great for this to continue to go on. Improved relations and, eventually, the lifting of the trade embargo, should aid in reducing the anti-American sentiment that has spread throughout Latin America.

Private enterprise has been opening up in Cuba since Fidel’s brother, Raul, assumed power in 2008, but the thaw in relations between the island nation and the United States should bring about more opportunities for growth while simultaneously loosening the grip of the Castro government’s state monopolies. The issue facing Cuba and the Castro regime, however, is determining how increasing economic liberalization will affect the regime’s ability to retain power. This is likely the reason that Cuba has thus far focused on improving diplomatic relations before discussing broad economic issues, as there is a chance that rebuilt relations could accomplish what the sanctions had initially intended by pushing the Castro regime out of power in Cuba.

As political fodder, the upcoming Presidential election should see plenty of discussion regarding relations between the United States and Cuba. From a purely economic standpoint, a thaw would be mutually beneficial for both countries, as Cuba would undoubtedly see its economy improve tremendously while the United States could enhance its political standing among the Latin American nations in which there has been a growing sentiment of anti-Americanism.