Yesterday, Cisco Systems one of the leading high tech companies reported disappointing earnings and sales for the past quarter. They predicted more of the same down the road. The main reason for the drop in sales was and will continue to be government austerity measures in Europe and Japan to fight deficits, which are, in some countries a lot worse than the U.S. relative to GDP.
The same has already started to happen in the U.S. The stimulus (not enough in many economists opinions) helped stave off some cuts but there will be no more stimulus.
The ideology of the right demands budget cuts, less government spending and lower taxes no matter what the economic reality. While rising federal deficits may be #1 in the minds of Republicans and even some Democrats in Washington it's not nearly in the the forefront for the average American. For them, holding on to a job, plunging property values and covering the mortgage or rent, are far more important issues.
Budget cuts and extending the Bush tax cuts for the wealthy will only cause more and more large companies heading in the same direction as Cisco which will lead to less job creation, more layoffs which will ripple through the economy and the fragile growth we have and are seeing will disappear through the rear view mirror.