Reply #50: Investors Rebuff Republicans in Poll as 2-to-1 Say Raise Taxes

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http://www.businessweek.com/news/2011-05-13/investors-rebuff-republicans-in-poll-as-2-to-1-say-raise-taxes.html

May 13 (Bloomberg) -- Global investors, by an almost 2-to-1 majority, believe the U.S. government won’t be able to substantially cut its budget deficit without raising taxes, rejecting a core stand of congressional Republicans.

Investors are also pessimistic about prospects for a deal to cut the federal deficit, a Bloomberg survey found. Almost 6 out of 10 doubt President Barack Obama and Republicans will reach an agreement by the start of the new fiscal year on Oct. 1, according to a quarterly Bloomberg Global Poll of 1,263 investors, traders and analysts who are Bloomberg subscribers.

“I don’t think raising taxes is a particularly good idea, but it might be the only option,” says Thomas Larsen, a trader at Nordea Treasury in Copenhagen and a poll participant.

Even with pessimism over a long-term deal, more than 7 of 10 poll respondents are confident Congress will raise the $14.29 trillion debt limit and stave off a default on U.S. obligations. The government will run out of options for avoiding default by about Aug. 2, according to Treasury Secretary Timothy Geithner.