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The PJ Tatler

by
Matt Vespa

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February 21, 2013 - 8:22 am

Yes, the sequester is coming.  Yes, it was the president’s idea.  Many thought, myself included, that Democrats wanted to go off the fiscal cliff since liberals would get their tax increases, they’ll get their defense cuts, and they’ll finally turn the page on the Bush Tax Cuts.  Hence, Democrats had no reason to come the the negotiating table to avert financial catastrophe.  However, a (BAD) deal was hashed out, and, ironically, 84% of the Bush Tax Cuts became permanent.  It’s a policy shift that got Debbie Wasserman Shultz a little confused back in January.

However, according to Joshua Green of Bloomberg Businessweek, the sequester will hurt Democratic congressional districts more than Republican ones, and could cost up to 700,000 jobs.

…a new study out [last] Thursday morning from Bloomberg Government (subscription only) does quite a bit to upend that logic. The study shows that Democratic congressional districts will be harder hit by the military cuts than Republican ones, and that eight of the top 10 districts that will experience the deepest cuts are represented by Democrats. Robert Levinson, the Bloomberg Government defense analyst who conducted the study, found that “Democrats won 47 percent of the seats in the House of Representatives in the 2012 election, but 58 percent of the military’s fiscal 2012 prime contract spending went to companies performing work in those districts.” Among the top districts, military spending in those represented by Democrats averaged $893 million this year, vs. $573 million in those represented by Republicans.

Additionally, Steve Goldstein posted on MarketWatch on February 19:

…. if the scheduled budget cuts called the sequester were to go into effect…macroeconomic Advisers says the result would be 700,000 job losses by the end of 2014. That would push the unemployment rate by a quarter-point, though the forecasting firm still sees the jobless rate shrinking to 7.4% by that point, from 7.9% currently.

“The macroeconomic impact of the sequestration is not catastrophic.  Nevertheless, the indiscriminate fiscal restraint would come on the heels of tax increases in the first  quarter that total nearly $200 billion, with the economy still struggling to overcome the legacy of the Great Recession, and when the FOMC is constrained in its ability to
offset the additional fiscal drag with a more accommodative monetary policy,” the firm says.

The sequester would actually help 2014 growth (by a slender 0.1%), the firm reckons, because it would push the Federal Reserve to keep rates lower for longer.

Republicans have another angle to exploit in depicting this president – and his party – as bad for the economic health of the nation.  It also shows that Obama really doesn’t care if he screws his own party with this issue, or on firearms, which has many Democrats – in red states – balking at the idea of more regulations that chip away at the Second Amendment.

Matt Vespa is a web editor at Townhall.com and occasional writer for Hot Air, RedState, and Townhall Magazine.

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All Comments   (4)
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Because there is NEVER any accountability for Democrats who play left, lefter, leftist...the Republicans will be saddled with the blame and take the fall for ALL negative repercussions.

Since the Stupid Party has all the messaging ability of paralyzed mime, they couldn't overcome ONE media news outlet that was in the small c communists pocket, much less nearly all of them.

The One World Socialists (aka small c communists) were never interested in doing a "deal". They know that they have no accountability and that they have their propaganda machine running three shifts. The public can't get the truth and doesn't appear to even want it. Certainly there is no great demand for saving this country. So, it's either sequestration or defenestration for America. Who cares? Certainly not the Democrats. They don't have to care. Nobody holds them accountable.
1 year ago
1 year ago Link To Comment
That study misses a couple of points.

First, unemployment is much higher than 7.9% and it isn't likely to drop. The more accurate U6 number is now at a steady 14.4% and that is after some significant "adjustments" going back a few months of the number of new jobs created. As the effect of Obamacare, new taxes and regulations kick in the U6 will only rise.

Second, a lot of those people who lose their jobs will either find lower paying jobs or end up on welfare. Either way, the difference in income will take a bite of the economy, particularly the local economies, which will then result in more job losses locally and from other contractors. Ironically the ones going on welfare will offset some of the sequestration savings as they will go from one kind of government dependence to one that is completely unproductive.

So relying just on fudged unemployment numbers isn't a good measure of predicting how bad sequestration will be.
1 year ago
1 year ago Link To Comment
The Republicans---the Palooka Party, which exists for the purpose of taking dives---will tie itself to the railroad tracks so that the Obama Express can roll over them. It's what they've been doing for the last two elections, and they seem to think it works for them---or they'd be doing something different.

The Republicans have been content to take the "guaranteed win" of the short purse for some time now, as long as it's guaranteed.
1 year ago
1 year ago Link To Comment
Obama cares only about hurting America's might, and with the sequester he will destroy our military might AND plant the seed of a possible depression .

Mission accomplished, subversive in chief.

1 year ago
1 year ago Link To Comment
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