Just some perspective on the dreaded sequester

Feb 25, 2013, 11:29 AM

Our government is spending $3,700 billion. We're cutting $85 billion. That's 2% of government spending. Now how will this effect the economy? Well, the economy cranks out $16,000 billion a year. Assuming every penny of government spending goes straight back into the economy where it comes from in the first place(it won't), that's an impact of half of one percent on the economy. It's 8 DAYS of government spending.

What's really sad about this mess, is these huge, tremendous, economy shattering cuts will do next to nothing to solve our problem.

People are so clueless that they think government spending is money into the economy, and government cuts is money out of the economy. Every penny government spends is a penny taken out of the economy. Every debt penny the government spends is a penny that will have to be extracted from the economy at some point in the future. Every penny government doesn't spend, is a penny not taken out of the economy. And here's the problem with debt: debt is money inserted into the economy before it has been extracted from the economy. It is money the economy now owes the government. It IS a burden on the economy just as your credit card bill is a burden on you.

Obama is hyping the cuts because that's a loss of power. Money equals power in Washington and in most dysfunctional places. If these cuts go through, the ruse is over. Obama is going to do everything in his power to make sure these cuts are targeted as much as possible to have a maximum impact on the most voters. Closing Yellowstone would be a good example. Fire some teachers....that's 40 people effected directly for every teacher fired. If you cut 2% across the board, no one would notice, and Obama wants people to notice. He wants to think you can't live without him. And he is wrong.

http://abcnews.go.com/blogs/politics/2013/02/president-obama-faces-cliff-fatigue-in-latest-budget-fight/

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cuts will have in your daily life. Look at it this way. If the federal government balanced the budget tomorrow and did not spend a penny more than it takes in (impossible for everyone you ask), that would be a net negative impact of 10% on the economy. The net positive economic effect of the federal government on the economy is the debt it spends, money that it puts into the economy that it has not extracted. That's $1.7 trillion out of $16 trillion.

That's why democrats like debt spending so much. Every penny of debt spent is a percentage of control and influence. It IS a short term boost and it creates dependency, and that creates power. But, alas, that money will have to be extracted (with interest) over many years, and that same positive is actually a much worse negative in the long term. That's how it's viewed by the economy on a macro level.

The government has inserted $16 trillion into the economy that it has yet to extract from the economy. It will never get back to where it was no matter what any politician tells you. And that debt is costing over $200 billion annually in interest. Let's say we get out of this mess in say 30 years and pray that interest rates don't go up. On average, every working American will work an extra YEAR in the next 30 just to repay what the government has already spent. If you look at it that way, the whole problem is manageable. But nothing is manageable until we can balance our budget. And that means entitlements have to be cut.

Just some perspective on the dreaded sequester

What needs to be discussed is:

I heaed Kucinich say those three were fine and stable...

They account for around 62% of federal spending, and are

Why not cut all of the above?***

Why not have a flat tax?

fair tax***

Makes too much sense and eliminates buying votes.

well...

Just let me opt out of SS***

I would love to.***

you can opt out of medicare!

Aren't both sides making it out to be the apocalypse?

the whole point of it was to be a big deal

which is why the Republicans were foolish to compromise...

They don't want you to know how little of an impact those

I suppose it's just a matter of how that money gets spent.

Re: I suppose it's just a matter of how that money gets spent.

you should have bought it and complained you dont have $$ to

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