STOP WITH THE SCARE TACTICS: THE SEQUESTER IS NOT THAT BIG A DEAL

STOP WITH THE SCARE TACTICS: THE SEQUESTER IS NOT THAT BIG A DEAL

Matt HealeySaturday,23 February 2013

The Snap:

The sequester will happen on March 1st. unless something is done about it. As I have written in previous posts, I am not sure that having the sequester go into effect is such a bad thing. Government spending is too high and needs to be cut. My only condition for the cuts is that they effect everyone.

The Download:

The sequester will cut $85 billion. That is the number that is being thrown around by the media. There are some opinions that the actual cuts will be lower. That sounds like a lot of money. After all, when the average Boomer looks at their total lifetime savings, they have tens of thousands, so clearly $85 billion is a lot and will totally fix our spending problem. Except that it will not. The total federal budget in 2012 was approximately $3.7 trillion. Viewed against that number, the total cut would be a little over 2%. 2%! That is nothing. Now, that is 2% of the total budget, the effect on discessionary spending will be higher as we can not cut things like interest payments on the debt. Still, we got ourselves into this by waging two unfunded wars and protecting a series of entitlement programs that had inherent flaws. So now we have to get out of it and budget cuts are required.

The problem is that the short term politics of fear are dominating the conversation. We have Leon Panetta saying that the budget cuts to the military will be hollowed out. “Within a year we will be unprepared.” Let’s look at this. The US currently spends 41% of the total world defense spending. The next highest country is China at 8%. So we spend 5x what the number 2 country spends. And a cut will cause us to be unprepared? We could cut defense spending in half and still have the most spending on defense in the world. In half — which no one is proposing. But it is not just defense that is complaining. We are hearing about TSA agents being fired and longer lines at airports, food safety workers being fired resulting in less safe food, and first responders being let go. This is all bull. There is a ton of spending that can be cut without really hurting the public. Granted we would have to figure out the best way to accomplish these tasks, which the government is generally not very good at, but it could be accomplished. Regardless, even if that is not true, the threat from endlessly higher debt is worse than the short term pain of these cuts.

Hat Tips:

TSD Budget Cuts Post, Sequester, Federal Budget, Leon Panetta, US Defense Spending, White House Scare Tactics, Image Credit: Wikimedia Commons

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