Big business didn’t send in the big lobbying guns to knock sense into Congress and Obama to avoid sequester. Federal agencies already have solid contingency plans. The cuts are a mere 2.5%, which isn’t much at all. The total cuts are $85 billion, which is chump change compared to the $1 trillion deficit the government currently runs.
All the huffing and puffing on both sides is aimed at scoring political points against the other and not arriving at a meaningful solution. We are governed by mediocrities with no apparent interest in actually governing.
Puzzling post. If it’s “chump change”, “nothing”, why do we need a “meaningful solution”?
OTOH, a 0.6% drop in GDP growth, especially in this economy, has real consequences for employment. Calling widespread furloughs “solid contingency plans” hides more real consequences for rank & file workers with bills and mortgages to pay.
Big business doesn’t care? That’s all right, then…
Well, if the deficit is $1 trillion a year then having great huff-and-puff arguments about an 8.5% reduction in that deficit isn’t really much.
I don’t know what the answer is. Spending our way out of the problem hasn’t really helped and sooner or later they government will probably have to monetize that debt by printing money and creating inflation. But cutting incomes will unquetionably hurt the economy.
Part of this post was because I was relieved that my wife, who works for the government, will probably have 5-7 furlough days this year, way less than many were predicting. So, her agency did plan ahead to soften the blow on employees.
“sooner or later they government will probably have to monetize that debt by printing money and creating inflation…”
Sooner. Since 2000, GDP has grown about 25%, while the money supply (as measured by M-2) has grown over 125%. That makes every dollar (and every dollar of debt) worth about 25 cents compared with 12 years ago.