posted on Feb, 28 2013 @ 05:01 PM
reply to post by beezzer
Yah...I think the point is that smartly targeted "automated spending cuts" of an equal amount would have been easier to swallow because the fat would
almost surely get hit first. But the sequester was actually designed to cut muscle. A poisen pill by design in hopes of motivating both parties to
If we could redirect the same amount of cuts to programs that wouldn't impact jobs in the same way, it would be better.
Lets skip the news outlets and DC and look at folks who have money in the game...folks who care less about politics and more about whether thier
investments make money..I find the investment community the most BS free zone for predicting economic outcomes, because their profits depend on
accuracy...and they care more about money than politics.
Macroeconomic Advisers LLC
•Our baseline forecast, which shows GDP growth of 2.6% in 2013 and 3.3% in 2014, does not include the sequestration.
•The sequestration would reduce our forecast of growth during 2013 by 0.6 percentage point (to 2.0%) but then, assuming investors expect the
Federal Open Market Committee (FOMC) to delay raising the federal funds rate, boost growth by 0.1 percentage point (to 3.4%) in 2014.
•By the end of 2014, the sequestration would cost roughly 700,000 jobs (including reductions in armed forces), pushing the civilian unemployment
rate up ¼ percentage point, to 7.4%. The higher unemployment would linger for several years.
So GDP falls a half-percent, Unemployment ticks up a quarter percent...and it "lingers" for several years...meaning it is difficult to combat...it has
a multiplier effect...the economies rate of growth slows which means the unemployment rate stagnates.
All BS aside...whether you are for spending cuts or not...the sequester is the least effective and useful way to get those spending cuts done. It
preserves fat, cuts muscle....and needed muscle during a recovery IMO.
edit on 28-2-2013 by Indigo5 because: (no reason given)