Sequestration 2013: How Many Jobs Will Be Lost?
According to to the Oxford English Dictionary, to "sequester" means to commit for safekeeping. So why the angst from many politicians and the media about the upcoming sequestration of Federal spending? Surely committing something, in this case money, for safekeeping is a good thing?
Most of the angst comes from the threat that lots of jobs will be lost because of the "cuts" that will be triggered. Of course, in reality, America is not facing "cuts" at all, but merely a cut in the increase in spending this year by the federal government. Interested parties cannot even agree on how many jobs will "be lost."
According to Macroeconomic Analysis LLC, it will be 700,000 jobs. The report which is cited hedges its bets by using the word "could."
"That could translate to 700,000 jobs lost (including reductions in the armed forces) and the possibility that higher unemployment 'would linger for several years,'" according to the report.
The panicky war of words does not stop at that figure, either. A site called Second to One claims it is far higher:
"The analysis concludes that the automatic spending cuts mandated in the Budget Control Act of 2011 affecting defense and non-defense discretionary spending in just the first year of implementation will reduce the nation’s GDP by $215 billion; decrease personal earnings of the workforce by $109.4 billion and cost the U.S. economy 2.14 million jobs."
The Federal Times starts low, and spins the job loses to far higher.
"The federal job cuts would consist of roughly 48,000 at defense agencies and 229,000 at non-defense agencies."
AOL Defense goes even further, claiming that the sequester could "cripple the economy" in one of the best doomsday predictions.
"All of this would cause real economic output in 2013 to contract by half a percent of GDP, and negative growth of 2.9 percent over the first half of 2013 would be officially termed a recession."
Then again there are other voices that urge us all not to panic. The Cato Institute's "Don't Fear the Sequester title evokes Blue Oyster Cult’s hit "Don’t Fear the Reaper" to calm riled nerves.
"For 2013, the only year that we know definitely counts, the sequester would slow the growth in federal spending by just $85 billion, from an expected budget of $3.55 trillion — less than a 2.4 percent reduction. When you consider that the federal government borrows $85 billion every 28 days, it’s hard to honestly call the sequester draconian."
And a large minority of Americans believe this is yet another example of D.C. crying wolf again. Maybe it is because Americans, who are having to cut back in their own lives, want DC to do the same.
"According to a new Pew poll, 76 percent of Americans want a deficit-reduction deal that includes some mix of spending cuts and tax increases — Obama's position. But if Democrats and Republicans can't agree to a deficit plan, 40 percent say we ought to just let the sequester kick in (49 percent say we should put off the cuts until a deal is reached). The damn-the-torpedoes faction includes about a third of Democrats polled and roughly 45 percent of Republicans and independents. What's going on here?"
Considering the sequester process is going to happen, we will all get to see if the doomsayers are right, or if their predictions go the way of the Mayan prophecy.