Is Uncertainty Becoming The World’s Biggest Economic Cost?

[Opiate32]

Business can usually adapt to high taxes, inflation or strict regulations if the rules remain consistent. Overtime they adjust there prices, review their budgets or even change the way they operate.
What often hurts investment more is uncertainty. When governments frequently changes policies, when regulations are unpredictable or when business can’t confidently plan for the future, many investors choose to wait instead of taking risks.

Some economists argue that high taxes slows growth while others believe inflation is the bigger problem but I sometimes wonder whether u certainty is even more damaging because it discourages decisions before money is invested in the first place.

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

[BIT-BENDER]

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

No I don't think uncertainty is the bigger obstacle economic growth, uncertainty is not even not even a concrete economical obstacle like taxation or inflation, uncertainty is abstract or should I say you can't point it out directly and for me uncertainty is unavoidable, it is always constant infact in life uncertainty is always constant.
Uncertainty is something you should always plan for in any economy even investing in Bitcoin is presumably an uncertain decision but we still make it.

If you consider uncertainty as an economical obstacle then how do you solve an uncertainty as an obstacle? For me you only have to plan for uncertainty because it's usually constant.

[Opiate32]

No I don't think uncertainty is the bigger obstacle economic growth, uncertainty is not even not even a concrete economical obstacle like taxation or inflation, uncertainty is abstract or should I say you can't point it out directly and for me uncertainty is unavoidable, it is always constant infact in life uncertainty is always constant.
Uncertainty is something you should always plan for in any economy even investing in Bitcoin is presumably an uncertain decision but we still make it.

If you consider uncertainty as an economical obstacle then how do you solve an uncertainty as an obstacle? For me you only have to plan for uncertainty because it's usually constant.

I agree that uncertainty is something we can never completely eliminate. Every investments involve some level to it.
The distinction I was trying to make is between normal market uncertainty and policy uncertainty. Businesses can usually prepare for market risks but it is much harder to plan when tax rules, regulations or government policies change unexpectedly. In that case some investors simply delay projects u til they have more clarity.

I don’t think uncertainty can ever be removed completely but government can reduce unnecessary uncertainty by being more predictable and consistent with their policies.

[Alpha Marine]

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

There is no way to measure it because sometimes, it's the taxation and inflation that cause uncertainty. Sometimes, political instability and incompetent government cause uncertainty.

There was a time in my country when the inflation was so unpredictable that it made businesses become confused. You could buy a product for $10 today, and you go back tomorrow to find out that the same product is not at $15. It's not like the trader got new stock, but he can see how the price of the product is changing in the market, so he has to sell at the new price or else he would be at a loss when he goes to buy new stock.
The inflation affected everything, and there was so much uncertainty everywhere. It got to a stage where vendors needed to confirm the price of goods from their suppliers before they sell to customers. A lot of businesses closed down temporarily and waited for things to become stable, but this increased the inflation even more.

The point is, yeah, uncertainty is bad in business, but something causes that uncertainty. The market or economy does not just stay on its own and become uncertain. So you don't measure uncertainty as a problem on its own, you look at the cause.

[ColdLava40]

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

It can't be the biggest obstacle because before you even start a business there are some risk you must look into to ensure a long term growth. During this period, you eliminate whatever thing you think you are not sure or certain about.

Every business need to pay up their tax and adjust to the inflated economy that's where market strategy and planning comes into play. But then inflation would to me be one of the biggest draw down a business has to face.

When the the cost of production becomes more than what you used to spend, you have to find ways to make sure the business survive, customer satisfied and profits too must be made.

[fuguebtc]

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

But uncertainty is not always the biggest villain or enemy.

What I think is that excessive taxes and inflation destroy a business very quickly. Because they directly bite your profits. But yes, you are right that frequent changes in policies make everything more hellish. Governments of all countries are almost the same in this regard. They change the rules every few months. And then they wonder why investors are holding on to money without taking risks! ,,, lol

That's how politicians work, they love to create uncertainty by introducing new regulations and changing plans frequently. This way they get attention and keep some people in their favor by giving special benefits. But it paralyzes any planning. Those of us who invest in crypto also feel very strongly that they may be relaxing the rules today, but there is no guarantee that they will not start cracking down again tomorrow.

And speaking of uncertainty, it may be the silent killer of the moment. Because it stops any decision before it even begins

[BIT-BENDER]

But uncertainty is not always the biggest villain or enemy.

What I think is that excessive taxes and inflation destroy a business very quickly. Because they directly bite your profits. But yes, you are right that frequent changes in policies make everything more hellish. Governments of all countries are almost the same in this regard. They change the rules every few months. And then they wonder why investors are holding on to money without taking risks! ,,, lol

That's how politicians work, they love to create uncertainty by introducing new regulations and changing plans frequently. This way they get attention and keep some people in their favor by giving special benefits. But it paralyzes any planning. Those of us who invest in crypto also feel very strongly that they may be relaxing the rules today, but there is no guarantee that they will not start cracking down again tomorrow.

And speaking of uncertainty, it may be the silent killer of the moment. Because it stops any decision before it even begins

But uncertainty is not an actual real obstacle, like taxation, inflation, shortage of man power, migration, even weather or wars, all of these obstacles could also be an uncertainty.
The OP was comparing Uncertainty with real concrete obstacles like inflation and taxation which could also pass as something that can be considered uncertainty if not well planned for

[goldkingcoiner]

Business can usually adapt to high taxes, inflation or strict regulations if the rules remain consistent. Overtime they adjust there prices, review their budgets or even change the way they operate.
What often hurts investment more is uncertainty. When governments frequently changes policies, when regulations are unpredictable or when business can’t confidently plan for the future, many investors choose to wait instead of taking risks.

Some economists argue that high taxes slows growth while others believe inflation is the bigger problem but I sometimes wonder whether u certainty is even more damaging because it discourages decisions before money is invested in the first place.

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

I think uncertainty has always been the norm for every economy since the dawn of human economy. And it has caused a lot of damage to the point where you would think we would have developed some kind of hedge against it by now...

But just as uncertainty damages investment, it provide opportunity elsewhere.

With pure certainty we would see economies led by undying monopoly, when a business has sole control over the market. And with certainty, that would be the outcome.

[snowpega]

There are many countries in the world that are facing uncertainty regarding business matters. And this is because of many reasons, like this can be due to that country policies, rules or regulations. And honestly, if we see these kinds of things in the current time frame, then such things are right now more dependent on the situation between Iran and America, which is starting to worsen again.

And if things keep moving toward bad verge, then I believe that the whole ecosystem can be disturbed, and the reason for that will be hiking rate of oil and gas. And why would this happen? Because each industry highly depends on oil and gas prices. Because if the rate of such things increases, then the rate of production will also increase. So, we should hope for the best so that things cool down between Iran and America.

[Fortify]

Business can usually adapt to high taxes, inflation or strict regulations if the rules remain consistent. Overtime they adjust there prices, review their budgets or even change the way they operate.
What often hurts investment more is uncertainty. When governments frequently changes policies, when regulations are unpredictable or when business can’t confidently plan for the future, many investors choose to wait instead of taking risks.

Some economists argue that high taxes slows growth while others believe inflation is the bigger problem but I sometimes wonder whether u certainty is even more damaging because it discourages decisions before money is invested in the first place.

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

There has definitely been heightened levels of uncertainty injected into global trade lately and the majority of those would be coming from America and more specifically Donald Trump. His scattergun approach - attacking allies and enemies at the same time, is a clusterfuck of incompetence. He might gain some small victories like a few extra factories built in the US to appease him and some companies will suck up to him because they have no choice, but ultimately it just makes trade with the US prohibitively expensive. So they get left behind as trade finds new markets and routes around all the extortionately expensive tariffs that defeat the point of globalization. It's also highly dangerous to peace in general because all those bonds that joined them to the world are severed for no purpose than to satisfy the narcissistic tendencies of one man.

[Unknown Op]

If businesses already knew the situation then they can handle high inflation and taxes easily for a long time but the main problem is not knowing what is going to happen next when government is changing their rules and economic policies on daily basis then companies has to be very careful and they has to stop the new hiring and this will affect the economic growth because less money is being invested into the businesses and people feel very insecure for investing in but if inflation is very high and there are heavy taxes then it can cause damage to the businesses if it continuous for a long period of time. A country that have pre defined policies, they have stable rules and inflation is controllable is more attractive for the investors then the one with lower taxes but frequent policies changes and economic uncertainties.

[Cryptomultiplier]

Business can usually adapt to high taxes, inflation or strict regulations if the rules remain consistent. Overtime they adjust there prices, review their budgets or even change the way they operate.
What often hurts investment more is uncertainty. When governments frequently changes policies, when regulations are unpredictable or when business can’t confidently plan for the future, many investors choose to wait instead of taking risks.

Some economists argue that high taxes slows growth while others believe inflation is the bigger problem but I sometimes wonder whether u certainty is even more damaging because it discourages decisions before money is invested in the first place.

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

Uncertainty in business makes one lose more because they can't fit their financial models into the equation and that makes expenses become erratic and unrealistic.
However, when we combine government policies that are uncertain with high unpredictable inflation, we have the results as catastrophic as can be which is detrimental to a business that wants to grow and make profit.

Uncertainty to me is worse than having to pay high taxes and be faced with constant inflation because when you as a business owner or investor can put these into your investment equation you can see an end but when there's uncertainty in the mix with policies that can change tomorrow without warning, making profit or having a return on investment for long term is almost an impossibility to calculate and envision in the scope.

[Korvane.io]

Business can usually adapt to high taxes, inflation or strict regulations if the rules remain consistent. Overtime they adjust there prices, review their budgets or even change the way they operate.
What often hurts investment more is uncertainty. When governments frequently changes policies, when regulations are unpredictable or when business can’t confidently plan for the future, many investors choose to wait instead of taking risks.

Some economists argue that high taxes slows growth while others believe inflation is the bigger problem but I sometimes wonder whether u certainty is even more damaging because it discourages decisions before money is invested in the first place.

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

Uncertainty may be the biggest short-term cost because it freezes decisions. But it is also where the greatest opportunities emerge. Stable periods reward participation; uncertain periods reward preparation, discipline, and the courage to act before clarity returns.

The Architect.

[letteredhub]

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

Uncertainty is what can be experienced in all spheres of human lives which shouldn't be taken as a major obstacle to economic growth of any nation. Nations economy grows base on the economic policies on ground and how they're drive at implementing them. You don't expect a politically unstable nation to experience a stable economy that should lead to investors coming in to invest with foreign capitals that should stabilise economic growth.

Increasing/multiple taxations  can actually drive away investors and hamper an economy more than anything, it can chase away investors to neighboring countries where they find it tax friendly. When this happens it can bring about inflation as fewer companies that tends to cope with the high taxation may decide to redirect the cost on the citizens by increasing the cost of products and services of the few goods they're producing as demand is gradually exceeding supply since many investors may have left due to the taxation.

[STT]

Its a fair point and uncertainity will restrict business and if true overall in an economy easily can trigger the start of a recession.  Its one of the excuses given for having a 2% inflation target instead of the stability of zero inflation, the idea being its better to have a steady target aided by a constant known decline in currency value.
 
Another perspective would be the outright admiration some have for a command economy, this is common where a military or undemocratic regime can force through policy at every level of the nation forcing consistency.  Some will say no choice is the best choice for a country forcing rapid advancement without delay or inconsistency of free will or economic freedom otherwise.  Genuinely there is some advantage though I will always favor democracy and proper capitalist economy for the best advance possible.

[Opiate32]

There has definitely been heightened levels of uncertainty injected into global trade lately and the majority of those would be coming from America and more specifically Donald Trump. His scattergun approach - attacking allies and enemies at the same time, is a clusterfuck of incompetence. He might gain some small victories like a few extra factories built in the US to appease him and some companies will suck up to him because they have no choice, but ultimately it just makes trade with the US prohibitively expensive. So they get left behind as trade finds new markets and routes around all the extortionately expensive tariffs that defeat the point of globalization. It's also highly dangerous to peace in general because all those bonds that joined them to the world are severed for no purpose than to satisfy the narcissistic tendencies of one man.

I think you are right that trade policy has added a lot of uncertainty especially for companies involved in international supply chains. At the same time, I don’t think the problem is limited to one country or one political leader. Business usually adapt to high taxes or inflation if they know what to expect. What really delays investment is when policies change frequently or government sends mixed signals. Whether it is tariff, tax reform or financial regulations, investors often value predictability more than favorable conditions that could disappear over the night.

In my view, reducing policy uncertainty doesn’t necessarily require lower taxes or fewer regulations, it requires consistency so that businesses can make long term decision with greater confidence.

[uneng]

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

Isn't uncertainity a consequence of high taxation and inflation rates? Everything is connected on this matter and the biggest negative consequence after all is life quality decreasing for majority, while a minority keeps accumulating more wealth. It's not hard to see that in daily routine.

Just look the quality of ingredients on our food decreasing, just like the size of the packages and portions. Each new year people have to work more days of the year only to pay bills and taxes. It's modern slavery, that is the worst aspect of it.

[viljy]

There is always uncertainty. In investing, uncertainty is taken into account when forecasting. However, up to a certain point. Forecasting becomes impossible (erroneous) if uncertainty increases to a state of chaos. That's how it is now. There are two major wars in the world that directly affect the state of the global economy. And that's just for now.

[Fiatless]

Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

High taxes and inflation can be managed by businesses using some measures. They would simply transfer the cost of production to consumers. But political or policy instability can destroy businesses.

An example is the coup that led to the change of goverment in different African countries. Many multi-billion dollar contracts were cancelled, and licences that gave multinational corporations access to raw materials were revoked. Many of these companies might go bankrupt because they have invested heavily in these countries.

[noorman0]

-snip-
Do you think uncertainty has become a bigger obstacle to economic growth than taxation or inflation? Which one causes the most long term damage and why?

Of course, policy uncertainty will complicate all business decisions and force investment to be held back. Global businesses, in particular, are often impacted by dynamic global policies, making it more difficult to estimate costs. In fact, we've become accustomed to seeing extreme trade policies since Trump took office, while (ironically) local policies have tended to be stable.