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Old 02-23-2013, 12:43 PM   #21
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Both national and local media have fallen in love with the word sequester. I recall looking it up when I first heard it used in this manner about 18 months ago. I believe that Jack Lew(?) of the WH staff first suggested that it be added to an upcoming budget bill. He will probably be our next Sec of Treasury. I'll bet he wishes he had not made the suggestion. But he did and we are all talking about it.
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Old 02-24-2013, 08:30 AM   #22
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Originally Posted by Midpack View Post
They've already delayed it once (remember all the overdone hand wringing in Dec), nothing stopping them from doing it again (and again). Several "leaders" have plans to delay it for several months, even out to 2014. Why would anyone doubt our ability to 'kick the can down the road,' perfected over a generation...

They delayed it by 'cutting' (IIRC) $24 billion, which was the amount that represented the first three months of cuts...

IOW, it was not just a kick the can down the road, but agreed upon cuts.. I would hate to see it kicked without some kind of cut... Let is happen and see where things go and make adjustments where needed...
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Old 02-24-2013, 10:10 AM   #23
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They delayed it by 'cutting' (IIRC) $24 billion, which was the amount that represented the first three months of cuts...

IOW, it was not just a kick the can down the road, but agreed upon cuts.. I would hate to see it kicked without some kind of cut... Let is happen and see where things go and make adjustments where needed...
If $24B of the easy stuff (per Simpson & Bowles) vs a goal of $4T over 10 years is progress to you, it's still kicking the can down the road IMO. But I'm hopeful they will make meaningful progress eventually too...
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Old 02-24-2013, 10:54 AM   #24
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Regarding the sequester, I view it as a minor issue given it's simply a small decrease in the rate of increase in US Gov't spending (i.e. Washington's definition of a spending "cut"). Even after sequester "hits", most Gov't agencies will still get more $$ than they got last yr. But each US Agency head is inventing absurd scenarios to protect their $$$ like a bunch of mini-warlords. Example- ABC News (hardly radically right-wing) took apart Transportation Sec LaHood on his claims of need for massive air traffic control cuts if sequester happens-
Devastating Sequester Spending Cuts? Give Me a Break! - ABC News
LaHood does have a point about built-in constraints. Cutting a budget late in the year tends to have disproportionate impacts throughout an organization. There is the 30 day notice for many jobs and the terms of some contracts. Plus the delays due to grievance procedures brought by those loosing their jobs or unions. They could have prepared for this but of course everyone in government acted as if it wouldn't happened. Except maybe DoD with reduced spending significantly in the final quarter of 2012 and you saw the handwringing over that.
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Old 02-24-2013, 11:16 AM   #25
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LaHood does have a point about built-in constraints. Cutting a budget late in the year tends to have disproportionate impacts throughout an organization. There is the 30 day notice for many jobs and the terms of some contracts. Plus the delays due to grievance procedures brought by those loosing their jobs or unions. They could have prepared for this but of course everyone in government acted as if it wouldn't happened. Except maybe DoD with reduced spending significantly in the final quarter of 2012 and you saw the handwringing over that.
Sorry but still not buyin' it. As ABC pointed out, LaHood's budget ($$ over which he has control!) after sequester would still be higher than last year. And he wasn't threatening large scale ATC cut backs under his Agency's FY 2012 budget.
However the meat-cleaver aspect of sequester is rather silly. As many have said, logic dictates prompt passage of legislation granting Transfer Authority allowing greater flexibility in ability of gov't agencies to minimize impact of this slowing of gov't expansion.

White House and media cry wolf
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Old 02-24-2013, 11:18 AM   #26
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What is more concerning is a lack of FY13 budget; the Continuing Resolution is quite binding and talk of a full year CR is a large concern.

Marc
Congress last passed a budget in April, 2009. Since that one expired we've been running on CR's. It's a national disgrace.

A budget resolution based on President Obama's 2013 budget failed to pass the Senate by a vote of 0-99.

So, apparently this is the new normal until there's a sufficient shock to the system to jar the present power structure into a new sense of where their priorities should be.
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Old 02-24-2013, 12:31 PM   #27
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Congress last passed a budget in April, 2009. Since that one expired we've been running on CR's. It's a national disgrace.

A budget resolution based on President Obama's 2013 budget failed to pass the Senate by a vote of 0-99.

So, apparently this is the new normal until there's a sufficient shock to the system to jar the present power structure into a new sense of where their priorities should be.
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Old 02-24-2013, 01:31 PM   #28
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Do people remember distinctions between long run and short run economic effects?

European nations, including the UK, went on austerity programs when economic growth was tepid at best. Now they're falling into recession.

UK isn't suppose to be as profligate as the PIIGS countries but they elected Cameron a couple of years ago to make across the board cuts, to improve their fiscal situation.

So GDP has fallen, unemployment is up, and the fiscal situation has deteriorated as tax receipts from weaker economy has fallen faster than the amount of spending cuts.

Cameron and Gordon Brown are deeply unpopular but they're continuing with austerity. Seems ideology trumps pragmatism or evidence of a theory being shown to be false.
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Old 02-24-2013, 02:24 PM   #29
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Do people remember distinctions between long run and short run economic effects?
The argument for Keynesian-inspired government spending to spur US economic growth would be much stronger if the proponents had a track record of turning off the spigot when the economy was growing. They don't. And, to be fair, many of those who call themselves fiscal conservatives had a similarly profligate record when they held the levers.

An alcoholic shouldn't take "just a bit" to ward off the cold weather. That's about where we stand now.

The legislators who are screaming about these "terrible" cuts (and they are on both sides of the aisle) are only revealing that they have no stomach for the real work Congress needs to do. The "cuts" amount to less than 3% of projected 2013 federal spending.

Regarding UK "austerity": They passed tax increases (which have taken effect) and spending cuts (which have hardly started).
1) Should we be surprised that taking money out of the productive economy through taxation reduces economic growth?
2) Does this same path sound like any other countries we know?

"Austerity" isn't the problem.
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Old 02-24-2013, 02:29 PM   #30
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If we can't find a way to survive on a couple % less $ than the prior year, there is no hope.
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Old 02-24-2013, 02:38 PM   #31
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What I don't get is that the 30,000 foot level the sequester spending "cuts" seem quite benign and would only affect future budgets (Nodak's post).

OTOH, the noise that is being made seem to suggest that significant cuts will occur (martyb's post).

I can't connect the dots. My off-the-cuff is that the gloom and doom of government officials is smoke - they doth protest too much.

What am I missing?

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Here's a Congressional Budget Office take on it.
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It will mean an unpaid furlough and a 20% cut in pay for however long it lasts. We are being told to plan for 22 weeks with one day per week unpaid.
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Old 02-24-2013, 03:15 PM   #32
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Originally Posted by samclem View Post
Regarding UK "austerity": They passed tax increases (which have taken effect) and spending cuts (which have hardly started).
1) Should we be surprised that taking money out of the productive economy through taxation reduces economic growth?
2) Does this same path sound like any other countries we know?

"Austerity" isn't the problem.
Do you have any cites for those claims, that they haven't cut anything over there?

Because there are a lot of interpretations like this one:

It's Official: Austerity Economics Doesn't Work : The New Yorker
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Old 02-24-2013, 03:36 PM   #33
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Quote:
Originally Posted by samclem
Regarding UK "austerity": They passed tax increases (which have taken effect) and spending cuts (which have hardly started).
1) Should we be surprised that taking money out of the productive economy through taxation reduces economic growth?
2) Does this same path sound like any other countries we know?

"Austerity" isn't the problem.
Do you have any cites for those claims, that they haven't cut anything over there?

Because there are a lot of interpretations like this one:

It's Official: Austerity Economics Doesn't Work : The New Yorker
Thanks for including what I wrote, as I didn't say "they haven't cut anything over there"

Regarding a reference: As it happens, Her Majesty's Government publishes the actual figures. They are here, (published by the Guardian), we needn't depend on The New Yorker's interpretation. Those huge austerity cuts amounted to real decreases of 1.58% between 2010/2011 (when they started) and 2011/2012. I think it's quite accurate to call these cuts small.
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Old 02-24-2013, 03:52 PM   #34
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If $24B of the easy stuff (per Simpson & Bowles) vs a goal of $4T over 10 years is progress to you, it's still kicking the can down the road IMO. But I'm hopeful they will make meaningful progress eventually too...

I only saw it as kicking the eventual implementation down the road... instead of what they usually do which is kick it down with NO cuts...

I agree... if they are having so many problems with $85 billion (which, BTW from what I heard to day is really on $44 billion for the rest of the year on the Sunday shows), there is no way to cut $4T....

Also, I think they need to cut $9T.... which will not happen anytime soon as only a few are talking about that drastic of cuts...
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Old 02-24-2013, 03:53 PM   #35
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Congress last passed a budget in April, 2009. Since that one expired we've been running on CR's. It's a national disgrace.

A budget resolution based on President Obama's 2013 budget failed to pass the Senate by a vote of 0-99.

So, apparently this is the new normal until there's a sufficient shock to the system to jar the present power structure into a new sense of where their priorities should be.
Actually the House has passed a budget... but the Senate has not...

This makes your stmt true, but I do not think it is directed at the right people....
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Old 02-24-2013, 05:42 PM   #36
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The sequester. I find it ironic that the guy who signed it into law does the most whining about it.
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Old 02-24-2013, 06:44 PM   #37
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That's all folks

Thanks to all who participated.
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