The world of politics is really about smoke and mirrors.
Take the supposed deadlock over the “sequestration” deal or as per CNN “series of automatic, across-the-board cuts to government agencies, totaling $1.2 trillion over 10 years. The cuts would be split 50-50 between defense and domestic discretionary spending”, which officials peddle as cataclysmic to the economy.
The debate is over this…
…a “$44 billion reduction in actual federal outlays for 2013” according to Cato’s Tad DeHaven, or a niggardly 1.2% of total spending.
Or from another perspective, spending cuts means that “that the US government budget will grow by “only” $2.4 trillion over the next 10 years” according to Cato’s Dan Mitchell
Which hardly means any cut at all, the conservative Heritage Foundation further explains, (italics original)
Federal spending is projected to grow from $3.6 trillion in 2013 to more than $6 trillion by 2023, a 69 percent increase without sequestration. Even with sequestration, federal spending would still grow by 67 percent. Sequestration barely even slows the growth in spending, let alone cuts any spending out of the overall budget.
The bottom line is that the sequestration is about the reduction of rate of growth of government spending. There will be no real spending cuts at all.
Nonetheless, all the ruckus about spending cuts, ironically, has been offset by one day of acquired debt.
From the Zero Hedge, (bold and italics original)
if one listens to Obama whose idea it was in the first place, an unprecedented $85 billion spending cuts will be sequestered, unleashing famine, pestilence, the apocalypse and grizzly bears (as all park rangers will be dead from starvation). Which is why we applaud the administration's desire to preempt this tragic for the nation outcome, by issuing, in one day alone: February 28, $80 billion in Treasurys sending debt to (obviously) what is a new all time high $16,687,289,180,215.37.
In other words, the entire apocalyptic impact of the sequester for 2013 was offset by one day's debt issuance…
From Debt To The Penny:
As the great libertarian H.L. Mencken lucidly expressed (In Defense of Women)
Civilization, in fact, grows more and more maudlin and hysterical; especially under democracy it tends to degenerate into a mere combat of crazes; the whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.
Politics wantonly make a fool out of the public.
1 comment:
I respectfully disagree. There's a bigger picture here than the long-term reduction in budget PROJECTIONS (you DEFINITELY got that part--sheer insanity). From what you've outlined, it appears that you're only looking at total outlays, which DEFINITELY need to come down.
The problem with sequestration is that the cuts are indiscriminate, across the board, make-the-programs-take-a-year's-worth-of-cuts-out-of-hide-with-only-six-months-remaining, irresponsible, political crap. The law identifies a number of budget items which are exempt (including salaries of the president and Congress and their individual expense accounts) and identifies items which are NOT exempt (to include salaries of all government people--well, except for Congress and the president).
Rather than giving the budget-line owners the authority to make rational, needed reductions, we have across-the-board slashing.
Example 1: instead of doing the right thing and downsizing the government workforce, let's just reduce their pay for the rest of the year by 20%. Why should we worry about their families or the local economies that will shrink due to reduced discretionary income.
Example 2: Even after BRAC actions, DoD still has over 5,000 sites that they fund, manage, upgrade, etc. Do we really need over 4,500 separate defense sites in the US? 666 (I know, scary!) of these sites are in other countries. Which other countries? Well, 526 of those sites are in only three countries: Germany (232), Japan (109), S Korea (85). Are we still occupying Germany and Japan? What in the world? But, hey. Instead of cutting that fat, let's just cut the military's money for refurbishing all of the equipment they've used up in Afghanistan! Oh, and don't forget to send all of those government workers home. We'll just use contractor labor to replace them--it only costs DoD twice as much to do the same work.
Thanks for listening.
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