Marketplace (radio) had an excellent segment on the Sequester yesterday, underlining its massive inefficiency. By cancelling a lot of solid long-term contracts, the federal gubment will essentially toss away a lot of its current built-in savings.
Cancel the sequester and the government will just go back to not ever cutting anything. It's better than nothing
Wrong on both counts - why is it "better than nothing" to not address long-term spending by cutting short-term spending that is just as likely to exacerbate short term deficits (which are decreasing without the sequester, btw....) by choking off revenues as it is to help them? That's not better than nothing - that's significantly worse than nothing, and every country that has tried this in recent years (look at Europe) has ended up worse off as a result.
Europe has zero relevance. They have a monetary problem. Their central bank is not nearly as aggressive as ours in offsetting fiscal drag. To suggest otherwise shows you haven't been paying any attention to QEinfinity. Simplistic Keynsenian analysis fails when we are talking about the fed changing its target and focusing on e the unemployment rate. On the cuts themselves: http://www.nytimes.com/2013/02/03/business/budget-sequestration-how-to-do-it-right.html One common argument against letting this process run its course is a Keynesian claim — namely, that cuts or slowdowns in government spending can throw an economy into recession by lowering total demand for goods and services. Nonetheless, spending cuts of the right kind can help an economy. Half of the sequestration would apply to the military budget, an area where most cuts would probably enhance rather than damage future growth. Reducing the defense budget by about $55 billion a year, the sum at stake, would most likely mean fewer engineers and scientists inventing weaponry and more of them producing for consumers. In the short run, lower military spending would lower gross domestic product, because the workers and resources in those areas wouldn’t be immediately re-employed. Still, that wouldn’t mean lower living standards for ordinary Americans, because most military spending does not provide us with direct private consumption. To be sure, lower military spending might bring future problems, like an erosion of the nation’s long-term global influence. But then we are back to standard foreign policy questions about how much to spend on the military — and the Keynesian argument is effectively off the table.
Wrong again, Let me give you a hint: Spoiler They have their own currency, have had multiple rounds of QE - and a big fat austerity fail which put them inoto a double dip recession and haven't made any deficit progress, and instead have made things worse. I don't think your point can possibly be more thoroughly repudiated. I may actually log off for the day.
The ECB Policy Rate is 0.75%. The deposit rate is 0%---they caused JP Morgan and tons of other institutions to shut down money market funds. Draghi announced OMT (outright monetary transactions---a bond-buying program for distressed countries with theoretically infinite firing power) by saying “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,”. Now whether you think that rhetoric fits the reality is questionable, but to say that the ECB has not nearly been as aggressive as the Fed is painting a very simplistic view.
Glad you backed off your Euro comparison, but you are still WAY off. Britain has a different set of problems than the U.S. The unemployment rate is down but so is output. In short, they have a productivity problem. That's not something QE is meant to address, and not something fiscal policy is relevant to. http://ftalphaville.ft.com/2012/09/19/1168431/the-boe-on-britains-productivity-puzzle/? The BoE on Britain’s productivity puzzle Izabella Kaminska Twitter Facebook Google+ LinkedIn StumbleUpon Reddit The minutes to the Bank of England’s September meeting are out, and we can’t help being drawn to the following comments about the UK’s labour productivity puzzle (our emphasis): The labour market had remained surprisingly resilient in the face of the contraction in activity. The unemployment rate had fallen to 8% in the second quarter, its lowest level for around a year, and employment was estimated to have risen by more than 200,000, with a rise in permanent employees accounting for more than half the increase. It remained difficult to reconcile this with the persistent weakness in output. Contacts of the Bank’s Agents had suggested that depressed trading conditions meant employees in some sectors had to work harder to generate new business.
It is still not enough. Just because the rate is down to 0% doesn't mean they can't do much more. Milton Friedman- "Low interest rates are generally a sign that money has been tight" France just had a terrible PMI report, and they need more monetary stimulus, not wasteful spending and tax increases. http://www.bdlive.co.za/world/europe/2013/02/22/pmi-paints-bleak-picture-for-france PMI paints bleak picture for France
they're not. they're against anything that republicans might appear to be for. to be clear, the republicans don't like the sequester either. that said, they're beginning to view it as the only realistic option option to cut spending, if not actually reduce the size of government, which, as we all know... Spoiler
Bob Woodward and his knowledge on the sequester: http://www.washingtonpost.com/opinions/bob-woodward-obamas-sequester-deal-changer/2013/02/22/c0b65b5e-7ce1-11e2-9a75-dab0201670da_print.html
Because all cuts are not equal. Why is this so hard to understand? Cutting fat is different from cutting money from really effective things. One is good; one is bad. It's just more self-inflicted stupidity by the government.
I was listening to the WSJ podcast this morning, and they said Romney would easily have been able to get past these "crises" such as the fiscal cliff and this sequester issue. Obama? terrible results
Oh. You listened to a WSJ podcast. Romney would have dominated. CASE CLOSED! scoreboard breh. 4moreyears
Everyone talks about the fat but somehow it never gets cut. I don't disagree that these cuts aren't ideal. But I also think the chance of getting ideal cuts passed is roughly zero.
Are you the girl from the statefarm ad who goes on the date with the "french model"? But seriously great point...but let me offer a rebuttal. I heard on NPR that Obama is the greatest president of all time and that Romney stupid and likes the color pink.
<blockquote class="twitter-tweet"><p><a class="hashtag" action="hash" title="#SequestrationThreat">#SequestrationThreat</a> crony "green energy" corporations now expected to produce the same zero jobs, but with 2% lower budgets</p>— David Burge (@iowahawkblog) <a href="https://twitter.com/iowahawkblog/status/305451353931673600" data-datetime="2013-02-23T22:57:32+00:00">February 23, 2013</a></blockquote> <script src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet"><p><a class="hashtag" action="hash" title="#SequestrationThreat">#SequestrationThreat</a> NPR hosts forced to pay for own Valium and poignant banjo interlude music</p>— David Burge (@iowahawkblog) <a href="https://twitter.com/iowahawkblog/status/305448135432474624" data-datetime="2013-02-23T22:44:45+00:00">February 23, 2013</a></blockquote> <script src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <blockquote class="twitter-tweet"><p><a class="hashtag" action="hash" title="#SequestrationThreat">#SequestrationThreat</a> Department of Rural Solar Train Development lays off up to 2 Deputy Assistant Press Undersecretaries</p>— David Burge (@iowahawkblog) <a href="https://twitter.com/iowahawkblog/status/305392622824992769" data-datetime="2013-02-23T19:04:09+00:00">February 23, 2013</a></blockquote> <script src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
http://blog.al.com/spotnews/2013/02/sequestration_will_harm_search.html the Republican/libertarian maxim---pro-life until it starts costing me money! wow i am a principled individual.
Here's an example of a stupid cut: http://www.politico.com/story/2013/02/sequestration-taxes-irs-fraud-fight-87968.html Cutting the IRS's enforcement division could end up costing more than is saved - meaning the net effect is an increase in the budget deficit. (also stunning from that article is that we collect $400 billion / yr less in revenue than we should given current law - just fix that and you'd solve the whole debt problem)
