Skip to comments.Spot The Sequester And The Consequences Of NOT Putting Our Fiscal House In Order
Posted on 02/24/2013 9:31:43 AM PST by whitedog57
The rhetoric about the sequester is mind numbing. To listen to analysts and politicians, the sequester will be like The Titanic striking an iceberg all over again. President Obama warns of thousands of teachers being laid off, beef prices skyrocketing because FDA inspectors will be laid off, etc., etc. As Bill Murray said in Ghostbusters, Human sacrifice, dogs and cats living together, mass hysteria Absolutely savage spending cuts.
But seriously, can you spot the absolutely savage budget cuts that will cause the mass hysteria? It is almost unnoticeable among the leviathan Federal budget that only keeps growing.
Another view of sequestration impact is the small green bar representing the cuts relative to the budget and the deficit.
In other words, sequestration barely puts a dent in our budget deficit.
But what if sequestration is cancelled AND unemployment rises again? David Greenlaw, James D. Hamilton, Peter Hooper and Frederic S. Mishkin have written a paper entitled Crunch Time: Fiscal Crises and the Role of Monetary Policy..
In their paper, they perform a simulation of what could happen to the 10 year Treasury rate. And it is horrifying.
Using a similar simulation, they find that the US debt to GDP will eventually rise to over 300%.
So it looks as if cancelling the sequester would be a disaster. But it brings me to a final point. If our economy is so sensitive to small Federal spending cuts, isnt this an argument to keep the size of government as possible?
But George Masons own Steve Fuller (School of Public Policy) is among those predicting a disaster if sequestration goes into effect. But Greenlaw, Hamilton, Hooper and Mishkin say the exact opposite: if we CANCEL sequestration, there will be a disaster. Take your pick.
In terms of Virginia, Fuller claims that nearly 10 percent of the 2.1 million jobs that would be cut under sequestration would come from Virginia. Of those, 136,191 Virginia jobs would be lost due to defense cuts; another 71,380 jobs in this state would vanish thanks to non-defense cuts. Virginia could also look forward to a $20.8 billion loss in gross state product.
All that because of small cuts to Federal spending that is barely noticeable on the charts? This is the problem when the country (and specific areas) are so dependent on Uncle Sam.
The only way out of this is to start cutting excess and start growing the economy. Unfortunately, every policy Obama and his minions introduce puts a halt on economic growth.
Heads up for a Virginia ping!
The best thing about the sequestration will be when all of Obama’s dire predictions don’t come true.
Perhaps the citizenry will not be so afraid of spending cuts once they survive a few....
First of all....not every piece is inspected.
Second...How dare the Federal Government threaten us with "no meat" while they eat kobe beef.
My best guess....Michelle stuck the meat threat in there as being a "healthy" alternative as well as wasteful use of our resources.
Better to feed our gas tanks than our food source.
I think right about now we need to hit the wires hard to the Republican Congress. If we don’t they will cave as usual. We gotta stay on top of this.
The sequester is a very small step in the right direction.
I have asked the question once before and I will ask again.
I know what sequester means but WHAT are they sequestering and how does this affect “whatever” the dummies on the left are attempting to do to us?
It doesn’t get at the real problem but doesn’t ruin anyone’s life either. The people’s business is finally getting started and Obama now has the balanced approach that he said that he has always wanted. We just have to keep up the pressure until real, meaningful cuts become inevitable, then accompanied by positive reinforcement from conservatives, easier and easier to sustain.
The sequester is a bill. Two guys named Nabors and Lew who are top Obama advisors came up with the idea and Obama liked it and pushed it at congress as part of the debt ceiling negotiations.
Congress passed it and Obama signed it. It forces “cuts” in spending over 10 years. The “cuts” are split evenly between defense and discretionary spending.
The “cuts” are not large enough to actually be “cuts”, they simply lower the amount of increase already built in to those budgets. some individual programs or depts could certianly be cut as the administration can “cut” where it pleases withing the parameters above.
The first year’s “cuts” are around $50 billion in defense, same for discretionary.
It’s peanuts in a country spending around $4 trillion a year, as in 1.2%.
I knew both of those definitions. Just did not put the name with the action of decreasing the rate of increase as being a “sequester”.
That is what happens when people use jargon as a label for a program that they are using (or trying to use) to cover up another failed program.
Political cloaking so to speak.
Sorry I just did not put two and two together. Guess that is because I think, live and act openly.
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