The Sequester Fear-Mongering: Will the Spending Cuts Trigger a Recession?

Filed in Gather Politics News Channel by on February 21, 2013 0 Comments

With the Sequester looming, many have taken to “Armageddon” type predictions, including President Obama. If the impending government spending cuts take place, will the United States slip into a recession? Will America be able to protect herself? Will the cuts “add hundreds of thousands of Americans to the unemployment rolls,” as Obama said?

Paul D. Shinkman from U.S. News and World Report notes that the military would need to find $46 billion by the end of the year in savings, out of $85 billion of cuts. The amount cited here conflicts with CBO findings, however, that conclude that the cuts will amount to $44 billion off this year’s total budget, not $85 billion. Either way, the rhetoric far outweighs the reality.

Some of the apocalyptic moanings:

  • Deputy Defense Secretary Ash Carter said that these savings “would have to come out of the pockets of those preparing to defend America from its next enemy.”
  • More doom and gloom from Secretary of Defense Leon Panetta, who moaned, “…there is no mistaking that the rigid nature of the cuts forced upon this department, and their scale, will result in a serious erosion of readiness across the force,” and
  • President Obama chimed in with more fear-mongering. He lamented, “it will jeopardize our military readiness; it will eviscerate job creating investments in education and energy and medical research.” He even said that criminals would be released because federal prosecutors will have to close cases.

If the spending cuts were so detrimental, why the heck did the president propose them and sign them into law?

Will the Spending Cuts Trigger a Recession?

The amount of money needed by the end of the year seems massive. And indeed it is, but consider that according to a report by Sen. Tom Coburn’s office released in November, of the $600 billion annual Pentagon budget:

“Billions of Defense dollars are being spent on programs and missions with little or nothing to do with national security, many of which are already being performed by other government agencies or are completely unnecessary.”

Some of the head-scratching examples include $9 billion spent annually on Pentagon-run grocery stores, over 100 “poorly run” “renewable energy-related initiatives” in 2010, funding for a smart phone app “to alert users when to take a coffee break,” funding for a study that “concluded people in New York use different jargon on Twitter than those living in California,” even funding for a brewery (see image), for instance. It seems that the duplicative programs in particular could be cut. If the children of America’s military went to public schools in the United States, that alone would save $10.7 billion.

According to a Wall Street Journal article, aptly titled, “President Armageddon,” the author notes that President Obama “just whacked the economy with a roughly $160 billion tax increase in 2013 that he says will do no harm, but he wants us to believe that $85 billion in spending cuts will trigger a recession.” If the president was willing to work with Congress in 2011, instead of threatening to veto specific cuts proposed by Republicans in lieu of the sequester, this government-manufactured “emergency” would not be taking place.

Image Source: Sillmwr

About the Author ()

Leave a Reply