Metro Atlanta’s small business owners view the budget and debt impasse in Washington from different political angles, but many agree on one thing:
If politicians don’t reach an agreement on raising the debt ceiling by Aug. 2, the looming government default spells trouble for their businesses and the country.
But most of those interviewed last week don’t believe the Democratic and Republican politicians will let the deadline pass.
“It’s pure politics, and it’s nasty politics,” said Rebecca Hadj Taieb, who, with her husband, opened The Little Wine Shop in Avondale Estates last September.
So far, Hadj Taieb hasn’t made contingency plans for a government default and partial government shutdown. “It’s not going to happen,” she said. Politicians will reach an agreement to raise the federal debt limit because they realize the consequences of an unprecedented default by the federal government are too dire, she believes.
Still, it worries her that bond rating agencies, such as Moody’s Investors Service and Standard & Poor’s, have warned that they could downgrade the federal government’s top credit rating if the situation deteriorates.
“It makes me want to call my congressman,” she said. The uncertainty may be causing people to cut back on spending, she said. She’s already seen a slowdown in sales this summer, although she hopes it’s seasonal.
She also hopes reasonable people will break the partisan stalemate and work out a compromise to reduce the deficit that include both lower federal spending and revenue increases.
“Everyone has to make compromises,” she said. “I don’t like to pay taxes, but I do it.”
Around the corner, retired federal employee Raymond Byrne said he shifted all his retirement savings out of the stock market last week “until this is settled.”
“I don’t think [a government default] will happen. ... They’re playing politics,” said his business partner, Marlon Heard, co-owner of Roost Gifts & Decor, a furniture and garden decor shop.
Still, Heard said he halved his inventory orders at a home decor trade show this month compared to a similar show in January because of the cloud looming over the nation’s economy and government.
“Our economy is not strong enough,” he said. “It’s not a time to be playing politics.”
While Heard said he thinks a default is unlikely, it would be devastating if it did happen.
“The stock market would tank. Our credibility in the world would not be good. It gravely concerns me if that were to happen,” he said.
Over in Sandy Springs, Four Seasons Trading owner Derek Korn said he’s monitoring news about the budget deficit and debt limit talks daily.
“It’s a grave concern. I think it will affect small and medium businesses,” said Korn, whose business sells outdoor furniture, sculptures and accessories made from teak wood, concrete and other materials. He said sales have slowed since last year.
He likewise thinks President Barack Obama and the Republican leaders will reach a deal before the critical Aug. 2 deadline, even if it’s only a short-term extension of the debt limit.
However, he fears that deal will mean higher taxes for him and his business. He’s monitoring his own expenses.
“We’ve had two years of unprecedented spending, and I don’t see that achieving” goals such as a stronger economy, said Korn.
Getting the economy moving again is the answer to the debt crisis, said Kenny Burts of Kenny’s Great Pies, and that won’t happen until real estate appraisals, skewed by foreclosures, are back on an even keel.
Politicians know this, and should take action, he added. In the meantime, said Burts, whose Smyrna-based company ships key lime pies all over the world, the government should stop putting off until the 11th hour decisions that needed to be made long ago.
“Too often it’s being staged for political purposes,” he said of the debt showdown. “My guess is they’ll work things out. They generally do.”
Over at Skip’s Chicago Dogs in Avondale Estates, owner Leo Shababy is deeply disappointed in the politicians on both sides.
“If I ran my business the way Washington runs their business, I’d be out of business. There’s too many hands in the pot,” said Shababy, who has operated his restaurant for 31 years.
A shutdown would “affect our business,” he said, noting that it could impact many government employees and other customers.
“It’s going to affect how many employees I can hire and how comfortable I can keep the customers. How many lights I can leave on,” he said.
Shababy said he has been praying for the politicians and making extra payments on his business’ mortgage, which he expects to pay off this year.
Still, Shababy said he hopes the Republican leaders will hold the line long enough to win significant reductions in government spending, even if it means risking a default.
“The government got too big anyway,” he said.
Staff writer Bo Emerson contributed to this article.
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