The Sequester Effect

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At this writing, the Republicans have refused to cave in on sequestration. Because half the cuts will come from defense, I thought the GOP would do almost anything to prevent the sequester from happening. But I was wrong. Whether they are operating on principle (i.e., sticking to their belief that spending must be brought under control) or simply doing what they think is politically advantageous, I couldn’t say. In either case, it may provide a lesson in political economy for all Americans.

Back in 1990, Bill Weld was elected governor of Massachusetts. Upon taking office, he instituted relatively minor cuts in social services. I can still remember the street protests and wailings from advocacy groups that the cuts would cause homelessness, starvation, and other enormities. Of course, after the cuts went through, nothing of the sort happened. People suddenly discovered that they could work at a job, or call upon relatives for assistance, or rely on private charity. It was an object lesson in how bloated and dishonest the welfare state had become since LBJ put in place the “Great Society.” Recipients and advocates of government largesse in Massachusetts had for a time persuaded a majority of their fellow citizens that welfarism was just, honorable, and necessary. But when Massachusetts ran into a fiscal wall, with deficits looming and taxes just too much of a burden, a Republican (Weld) squeaked into office and — poof! — the illusion that the state alone stood between the less well-off and a Dickensian fate burst like a soap bubble.

The sequester may prove this point again, and on a national scale. The Obama administration has been ratcheting up the hyperbole as the dread date of March 1 approaches. Beware the Kalends of March! Children will be thrown off Head Start. Small business loans may be delayed, or even (gasp!) unobtainable. National defense, on which we spend about as much money as the rest of the world combined, will be compromised when civilian employees of the Pentagon are required to take a day off per week without pay. And God alone knows what else may happen.

In fact, sequestration calls for the elimination of a little over $1.1 trillion in federal spending over a period of ten years. That’s about three cents out of every dollar in a budget that has doubled under Bush II and Obama. If the American economy can’t survive that, then the country may as well pack it in and become a province of China.

Probably the Republicans will cave later in March, as defense contractors join food stamp recipients and the long-term unemployed in bleating that the trough is no longer full. But maybe not. Maybe they’ll stand firm long enough for the public and the establishment media to realize that sequestration ain’t so bad after all.

Sequestration is a lousy way to trim the federal budget. But it’s better than business as usual. And it just might teach the citizenry that it can live with a little (or even a lot) less government.




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Comments

Jim Henshaw

re this: "In fact, sequestration calls for the elimination of a little over $1.1 trillion in federal spending over a period of ten years."

It calls for a slight reduction in the rate of GROWTH of the federal government over ten years.

Jon Harrison

Yep, that's right.

Fred Mora

You're not joking about the hyperbole, Jon.

Ed Schultz: "Now you've got a budget of three and a half trillion dollars in this fiscal year. This will take $85 billion out of it. That's damn near a third." (!!!) Ed, your dear public schools failed you. That's not even 3%.

CBS: "Kids without vaccines; schools without teachers; and massive airport delays". You forgot the locust and the Potomac water turning into blood.

A quote from the WSJ to put things in perspective:

Even after the sequester, the federal government will spend $15 billion more than it did last year, and 30% more than it spent in 2007. Government spending on nondefense discretionary programs will be 19.2% higher and spending on defense will be 13.8% higher than it was in 2007.

You remember 2007? The year planes fell off the sky, starving teachers died in the streets, and sick children piled up in hospitals? Yeah, me neither.

Jon Harrison

At least Ed seems like a guy you could argue with over a beer. So unlike the egregious Lawrence O'Donnell or the insufferable Rachel Maddow. The daytime crew at MSNBC is perhaps even worse -- except of course for S.E. Cupp. I could see spending a weekend in a nice hotel with S.E. Maybe she could bring Alex Wagner along for the ride.

Russell Hasan

Good analysis, but, of course, while praising the sequester and discussing the good it will do, you completely ignore that it is almost entirely the result of the Tea Party Congressmen in the House, who courageously defied both the GOP establishment and the Washington insiders in order to force the sequester as a condition to raising the debt ceiling. To be fair, one must give credit where credit is due--assuming that one wants to be fair.

Jon Harrison

I wasn't aware that as part of my writing I have to check certain boxes designated by my readers.

This was not a piece about who is or is not responsible for the sequester. Indeed, the sequester was put in place by Congress (not the Tea Party members alone) as a doomsday device, or poison pill, with the purpose of forcing a budget deal.

That we are talking about cutting at all is partly due to the rise of the Tea Party. But that doesn't change my overall view of the movement one iota.

Personally, I favor reductions in spending on defense and some domestic programs (and the elimination of some others), and a lowering of the top tax rate to 25 or 28 per cent. At the same time I would like to see thoroughgoing tax reform that, if possible, increases the revenue stream in order to help bring the federal budget into balance. This would mean the elimination of most deductions for high earners (over $200,000? $300,000?) and means-testing for programs like Social Security and Medicare.

Although I think Obamacare is a mediocre piece of legislation, I favor some form of national health insurance. There are of course various models. As I've stated here before, every advanced nation in Europe, North America, Australasia, and East Asia except the USA has some form of national health care. It should be noted that in none of these countries is there any sentiment for repeal and a move to the US model.

I'm not smart enough to know whether the numbers add up for the program outlined above. But I think something approaching it could be done in the real economic world. Whether Tea Partiers or libertarians or anybody else agrees with me has no effect on my views.

Bob Straub

According to Bob Woodward in his new book, "The Price of Politics", the idea for the sequester came from the White House staff. Bob Woodward isn't exactly a Fox News talk show host. And the Washington Post (not your everyday right-wing screed) gave the Prez four Pinocchios for saying, during a campaign debate with Romney, that Congress did it.

Jon Harrison

As the Woodward-White House story has devloped, it's become clear that once again Woodward is playing with the facts for his own purposes. His career is filled with such moments. He is, in this writer's opinion, an untrustworthy messenger on this and any other subject.

Your apparent respect for Woodward and the Washington Post is misplaced. Harry Truman was right when he said that a man who believes what he reads in the papers is a fool. Not that everything the Post or the Times (or Fox News) reports is false, but reader beware no matter who is doing the reporting.

The White House wanted the sequester because it thought it could turn it into a reply of Gingrinch shuts down the government, thereby reaping political advantage for itself. That it wanted sequester to happen becuase it cared desperately (or at all) about runaway spending, is just wrong.

Bob Straub

Jon, thank you for the reply.

But please don't form an impression that I have any special respect for Woodward or the WaPo.

I consider myself to be a Libertarian, and I have been a member of the national organization for decades. I am not as well-read as many, but I try to think hard about politics and philosophy. I want maximal individual freedom, economically and socially, and minimal government.

I will, though, consider myself chastened somewhat by your comments on believability in Woodward, the press, etc.

I posted what I did only to point out that Obama wasn't quite speaking the truth when he blamed the sequester on the Republicans, and that even very non-Republican sources are calling him on it.

If I ever had a little trust in Obama (and it would have been little), I certainly don't now. What we're seeing is 100% political theater. Obama suggested sequester figuring that the Reps would never buy it. Since they did, he's now doing everything he reasonably can to exacerbate its effects, scare the general public, and make the Republicans take the blame.

But I am not trying to defend the Republicans much, either. To me, with few exceptions, they're just wannabe Democrats these days, and they aren't very good at even that.

Bob.

Jon Harrison

Thanks for taking the time to clarify. Interesting. Please keep commenting.

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