Monday, February 25, 2013

More Sequester Madness

We've been concerned for some time about the potential impact of "The Sequester". Recently, Desert Beacon pinpointed how Nevada will be hurt by this hefty "austerity attack".

And by the way, take a look at how austerity is working out in Europe, where it originated. Greece & Spain are mired in Great Depression levels of economic contraction and unemployment. Italy has suffered immensely as well, which is why voters there largely rejected austerity in last weekend's election.

And it's not as if Americans don't realize what austerity has done to Europe. Just take a look at what kinds of budget cuts Americans want to happen.

Consider the chart that Pew published with its [recent report on Americans attitudes on the federal budget] -- the only popular spending cut is to foreign aid, which represents less than 1% of the federal budget, and even here, a plurality of Americans want foreign aid to go up or stay the same.

This is not uncommon. On nearly every area included in the survey -- education, infrastructure, health care, national defense, environmental protections, aid to the needy, etc. -- less than a fourth of the population wants to see spending cuts, and a clear majority want spending levels to either increase of remain at current levels.

So a rather large supermajority of Americans don't want austerity! People are realizing just how reckless this "Sequester" is. So why is Congress still poised to let this happen?

If implemented, "The Sequester" likely won't even make a lasting debt on the budget deficit. But wait, isn't that why it was created? Yep... But since it will hurt economic growth if implemented, "The Sequester" undermines its own purpose by reducing the amount of taxable income.

Again, Americans are realizing this. Even many Republicans don't want this to happen. For goodness sake, what has the Republican Party come to when Governor Jan Brewer (R-Arizona) becomes the voice of reason?!

Perhaps she and other jittery Republicans are finally worrying about what happens if/when these budget cuts go into effect. And perhaps they're remembering what happened the last time Republicans in Congress wreaked havoc on the federal government.

“Before the [1995] government shutdown it was very much an open question in most people’s minds which party would win,” recalled Paul Begala, a Clinton White House veteran, and an insider at the time of the shutdown, in a telephone interview Friday. “Republicans were very confident at the time that the government would shutdown and people’s lives wouldn’t change. They were wrong. … [W]e all saw that theory proved in ‘95 and ‘96 and it’s going to happen again.”

Sequestration is different from a government shutdown in some key ways. It won’t bring myriad government services to a halt, but it will delay them and complicate them and make things more expensive and less convenient for ordinary taxpayers. It will also lead to layoffs and furloughs.

This week, the Obama administration is taking steps to publicize these costs, including the president himself, who will deliver remarks at a shipbuilding facility in Virginia on Tuesday.

“If you live in Newport News or Pascagoula or any other of a hundred Navy towns — San Diego to Portsmouth — you know this is going to hurt because this is going to stop construction on ships,” Begala predicted. “So I don’t think it’s going to last very long.”

Once it happened, the 1995 federal government shutdown was declared a political disaster for Congressional Republicans. Americans were largely blaming them for closed doors at everything from national parks to the National Institutes of Health. And they paid a hefty political price during the rest of the 1990s.

If no budget agreement is reached by March 27, we may see another government shutdown this spring. But so far, many political players in DC think "Sequester" backlash will be enough to bring about a deal on that and the larger federal budget some time next month. At this point, many Nevadans are hoping this is true and Congress can get its act together soon.

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