Sequestration

Is a fancy word: it means, in the memorable phrase of Congressman, Sean Maloney, "Congress screwing up the economy for no reason."

It's true that the projected government deficit is over $1.1 trillion, a mind-boggling number, but cutting spending would make that number worse. Why? As the miniscule retreat in GDP last quarter demonstrated, when we cut government spending, the whole economy is negatively affected. We teeter between recovery and renewed recession. Further, the experience of European countries, demonstrates that austerity does not create prosperity; it created renewed recession in the UK (triple dip) and depression in Greece.

The "sequester" has the Republicans worrying about cuts to Defense, complaining that this will cost jobs (it will), but they're not worrying about, and want to increase cuts to domestic programs. The cuts already mandated would not only cost even more jobs (civilian programs create more jobs per dollar than defense), but they would hurt our most vulnerable, and our future prosperity.

Cuts to domestic programs will: cut 70,000 children from Headstart, deny treatment to 373,000 mentally ill (adults and children) and reduce small business loan guarantees by $540 million. In addition, the $85 billion in cuts on Mar 1, could include, according to Congresswoman Nita Lowey, "furloughs of air traffic controllers, food inspectors, border patrol, reduced investment in safe drinking water and medical research, diminished military readiness and embassy security."

Think about this logically: if you reduce expenditures March 1st by $85 billion, how is that going to help us recover from the Great Recession? It will cut that amount of money (US multiplier estimated at 1.29 to 1.73) from flowing into the economy, cutting jobs, cutting purchases--as well as needed services. It won't "grow" the economy; it will shrink it by at least $109 billion--in one month.

Greece, subjected to radical austerity, has seen tax receipts plummet with government cuts: its ability to pay back debts is reduced, not enhanced by austerity.

Austerity proponents speak as if "business confidence" will be restored by cuts, and prosperity and jobs will magically return. Why? If everyone, except for banksters and one-percenters, have less money, who's going to buy what businesses sell? The wealthy are too few to create enough demand, so there's no reason for businesses to hire more workers, or produce more goods, if austerity means everyone--except the wealthy--will buy less than they did before. So where are more jobs to come from?

The Roman Empire was in a centuries long depression before it collapsed; its gold standard prevented expansion of the money supply; further, when Senators hoarded gold, money contracted, deepening the depression. Today, the Federal Reserve can expand the money supply, as can the Federal government. When demand is lacking, Government should build demand, not cut it. Only during a full recovery, should long-term budget deficits be cut, by tax and health care reform and withdrawal from an empire the US can no longer afford.