But consider what happens if the automatic cuts actually do take place. According to Jamie Dupree, a reliable and veteran reporter on Capitol Hill, the sequester is not just a reduction in the rate of spending. He reports that the cuts would result in an actual baseline reduction in the federal budget for FY 2013. And while the amount of actual reduction might seem a drop in the bucket, it would be the first drop needed to start the flow of government funds moving in the right direction.
Of course, with Republican "inside the Beltway" experts convincing GOP lawmakers that the public will blame the GOP for the alleged economic meltdown we will incur from actually allowing the automatic cuts to take place, Republican leaders have started to exclaim that the very cuts they determined necessary in order to restore the nation's creditworthiness in 2011 are now no longer acceptable. And the Democrats, who controlled the Senate and passed the legislation, decry these cuts as well now that they are around the corner.
And don't forget President Obama. Dupree, who is completely nonpartisan, pointed out in his own blog that the legislation "was evidently his idea," along with that of the aforementioned parties in Congress. But now, as the tough medicine (which is really just a droplet) is about to be administered, the very cuts passed into law are creating another "crisis" that many argue will put us in another recession.
As noted before, for a lot of us the recession has never ended. And don't be fooled by those roaring good times on Wall Street. A little-known fact is that the Federal Reserve's endless effort at pumping liquidity into the market has included endless purchase of equities. It's easy to be on a high when oxygen is being pumped into a room. But just like might be the case in a casino or two, the high enjoyed while the oxygen is flowing goes away when the money is lost and the true light of day is confronted.
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