The latest firestorm in Congress’ budgetary wars is the sequester, a series of across the board automatic spending cuts to Federal programs totaling $1.2 trillion over 10 years. The sequester will particularly affect military spending, and damage every state in the union.
This is a serious problem, and designed to impose European style austerity over the country. It is a plan no one wants, and no one thinks is a good solution. But, of course, in the upside down world of the United States in 2013, it is the plan we have all agreed upon two years ago. If the cuts are to go forward, the economy will suffer an $82 billion dollar cut this year, potentially costing the nation half the job growth it experienced over the past year. The total could be 1 million jobs.
Needless to say, the impact of this devastation is not entirely knowable. The markets have had time to prepare for it and should know its coming, yet Wall Street has been in fine spirits the past week or so. The US and world economy will not suffer a terrible, gut-wrenching, shock like a default on US bonds.
So maybe, that shock avoided, there is after all some silver lining in the clouds. Maybe the damage will be severe enough for folks to take notice and constituents see the reality of the posturing that has gone on of late. Maybe the true damage of austerity will be enough that the maniacal tax-cutting, budget-slashing trolls on the right will finally return to their caves. Maybe the damage done to essential domestic programs will force everyone to substantively address the real drivers of the debt like health care spending, and do it in an honest, effective and fair way. No more craziness about death panels and posturing over killing granny, instead we can look at real sensible solutions that won’t wreck the retirements of real people.