I haven't heard much talk about the automatic spending cuts that will take effect, beginning January 1, 2013 if no budget plan is reached.
There has to be a reason we're not hearing about the automatic cuts.
Sequestration will hit California particularly hard, Victor Valley Daily Press.
California will be hit hard by sequestration, the automatic spending cuts in the federal budget set to go into effect Jan.1 unless Congress agrees on a plan by year end to reduce the federal deficit by more than $1 trillion, according to a study by an private economic development council.
If sequestration goes forward, combined with the earlier mandated cuts to the Department of Defense, the state will lose 336,000 defense-related jobs, $21 billion in economic output and $6.9 billion in personal earnings over the next eight years, according the Southern California Leadership Council and the Southwest Defense Alliance.
Sequestration will account for 136,000 of these lost jobs, $7.5 billion in reduced economic output and $2.4 billion in lower personal earnings, the study revealed.
Sequestration calls for $1.2 trillion in spending reductions from fiscal years 2013 through 2021 from both defense and non-defense departments.
However, defense spending will be disproportionately affected. The Department of Defense accounts for 19 percent of the federal budget but is slated to take 50 percent of the required sequestration cuts, meaning that the Pentagon must cut $492 billion in military spending over the next 10 years. This is on top of the $487 billion already set to be cut from the defense budget over the same decade.
I say gas er up, put it in D, and hit the gas. The sooner we hit the bottom of the canyon the sooner we can get things straight.
ReplyDeleteI agree; this is all political theater.
DeleteIt's not a fiscal cliff it's a fiscal slope. Few people would notice the spending cuts but everyone would notice the tax increases. By the way what's involved in the negotiations is trivial stuff that can be addressed. We are not going to get things straight on the tens of trillions of unfunded promises (some including myself would call them actuarial liabilities that are not on the U.S. Government's books). We will see social unrest big time - Dickinson is looking better all the time. Just my two cents worth.
ReplyDeleteYou are correct if it is agreed that a recession bordering on a depression would not be noticed by most folks.
DeleteIf the automatic cuts kick in as required by the law right now, it would be devastating. But only for those affected by the economy. The lower-middle class and the poorer social classes wouldn't notice a thing. University students, at least for a few months, wouldn't notice a thing. Those surviving only on social security would have to tighten their belts a bit. Some Medicare bills might not get paid.
During the 1929 Great Depression, I don't think my grandfather in Newell, South Dakota -- just a few hours directly south of Dickinson -- was even aware there was a Great Depression. He pretty much experienced an economic depression throughout his adult life, just a series of "little depressions year after year, having immigrated to some of the most arid land in the US, coming from Trondheim, Norway, via Ellis Island.
But he was always, to me, the best grandfather one could have, and life never seemed to get the best of him. Lots of fond memories. And yes, you are correct, if he were alive today, in arid northwestern South Dakota, he wouldn't even be bothered by a fiscal cliff.
Oh, which reminds me, I had to chuckle today when some talking head on CNBC called it a "physical cliff." She was talking about how men and women invest differently. I quit listening as soon as she said "physical cliff."