Tuesday, March 5, 2013
In Short Supply
With some three days now behind us with what was apparently the financial Sword of Damocles hanging over our heads may not have been so dangerous. Or is it perhaps not the Cicero reference that we should use, but instead that of Edgar Allen Poe's “The Pit and the Pendulum”? Whatever the literary metaphor used however, many of our national leaders and their media minions would still like us to believe that we are on the very brink of financial disaster. What, again?
After all, we haven't had visions of this kind of Doom and Gloom for the nation since … the fiscal cliff extension of January. No wait, it must have been the last time that government negotiated its last continuing resolution on the national budget. Or was it the time we raised the debt ceiling the time before that?
No I remember now, it was all the way back in August of 2011 when the President and his staff in the White House proposed a financial Doomsday Device last discussed while coming out of financial malaise of Jimmy Carter's Administration (often also considered a Doomsday Device). For those who don't want to do their research, this was something from what is remembered as the “Gramm-Rudman Act” of 1985 proposed during the Reagan Administration as an emergency control for a government deficit considered to be out of control when it reached (wait for it) $1.8 trillion. This court of last cut was known as: SEQUESTRATION.
The concept was a simple enough one. If Congress and the President couldn't agree on federal budgets that began to get the national debt under control, automatic and across the board cuts to that budget would be made to do what Republicans and Democrats could apparently not do for themselves. While the federal government never actually used Sequestration at the time (nor did they actually reign in deficit spending for that matter), the general growth and improvement in the national economy caused the issue to drop off of the radar screen of the American public in the 80's.
Fast forward twenty-six years to the middle of the next great recession (or perhaps an even greater one, depending on the expert). The economy is once again in the doldrums and the national debt has been growing well in excess of $1 trillion per year (almost in fact, increasing at the level annually as the total National Debt during Reagan's days). Democrats and Republicans, caught up in the never-ending election cycle and their belief that victory lies in counting coup on political opponents, cannot seem to find common ground on the common good of the nation. (I refuse to use the word Compromise, since it's now equated to Capitulation.) So someone in the White House with some knowledge of history dug out the concept of Sequestration, the President embraced it, and Congress quickly passed it on a bi-partisan basis. After all, its implementation would not happen until after the next election, and who among them ever gives a damn about things so far in the future.
Fast forward again to today, and the 'Chicken Littles' in DC run the streets of the city (or hold press conferences in front of first responders and defense workers) telling us that either the sky is falling or that we shouldn't be afraid of Armageddon just yet (usually the person who previously tried to scare the crap out of us). Because of enthusiastic bi-partisan embracing of something that they proposed eighteen months ago and a refusal to do anything about triggering it since, we could yet see these chicken come home to roost (that for you Rev Jeremiah Wright). They tell us now that while not tomorrow, someday soon we're going to find some things in short supply. They're right of course, but not in the way they think. Here in fact is a partial list of such items that we're seeing already (in no specific order): common sense, undistorted facts, unbiased analysis, and of course ... potential solutions.
There are also a number of things that haven't been in short supply during the same period: bombastic discourse, meaningless rhetoric, shameless posturing, and government money. Sequestration will in fact do little more than reduce the rate of baseline budget increases due to occur. The government budget process automatically increases each year as part of their arcane calculations by averages of from four to six percent. Sequestration merely reduce those increases by $84 billion, or some 2.4 percent. Now don't get me wrong, there will be some hardships ahead, as our fearful leaders purposefully select targets that might do the most damage to their political opponents. The send workers packing, cut essential strategic initiatives, and even to some extent endanger citizens in their quest to make political points. They'll even let prisoners out of jail illegally in the hopes of currying political favor with their supervisors and scaring us all half to death.
Of course the rest of us have learned to do with two percent less since the temporary tax holidays of January for FICA went away, but we certainly can't expect those chosen to lead the country to be able to make the same kinds of tough decisions like canceling travel plans we've made and can no longer afford. We've also learned to do with less since gas prices have more than doubled in the last four years, groceries have gone up. (Can you say ethanol?) And in spite of what we're being told, inflation of our currency in general has meant that we increasingly have to do more with less.
In fact, You will find me instead celebrating the process of Sequestration, since it may serve as the only attempt at the reduction of federal spending that occurs in 2013. It's obvious that the feds can't get their own house in order, and the Law of Unintended Consequences of Sequestration will be usded to do so if it must. All of this of course, means that one further thing is going to be in short supply for the government in the days ahead, my sympathy.