Congress is about to make a colossal blunder unmatched in 76 years. It was in 1937 that lawmakers decided to cut government spending, which put the brakes on rapidly increasing business activity and sent the country back into the Great Depression.
We are 24 days away from "sequestration," arbitrary across-the-board spending cuts that congressional Republicans demanded. Sequestration can only be avoided if a super-committee can agree to something else. It doesn't look like that's going to happen. The "thinking" is that getting the government out of the way will let the private sector flourish.
Um, that didn't happen in the last quarter when GDP fell because of the steepest defense cuts since 1972.
The New York Times estimates sequestration will kill a million U.S. jobs. Others say it could cost 1.4 million jobs. Reports the Times:
...beginning at the end of this month, at least half that amount — more than a million jobs — will start to disappear because of a mindless government austerity program that no one in Washington seems able to stop...
bring on the unemployment. The first jobs to go will be in the defense sector, but the losses will soon spread as contracts to states and cities are cut, education and police grants are cut, and payments to Medicare providers are cut. Even the aid just approved for victims of Hurricane Sandy will fall under the sequester’s ax. Americans are about to find out what happens when an entire political party demands deficit reduction at all costs, because those costs will be enormous...
Here's what will happen to the military, according to Stars and Stripes:
...the military is being forced to cut training, cancel construction projects, defer maintenance of ships, aircraft and vehicles, cancel professional conferences, halt most temporary duty assignments, and interrupt supply and equipment purchases.
Quality of life for the military also is being impacted as dependents lose jobs, local economies and businesses lose contracts, and base operations, including family support programs, take immediate budget cuts.
The entire Department of Defense has imposed a civilian-hiring freeze. At least 46,000 temporary employees are getting pink slips and many more employees under “term” contracts won’t see those contracts renewed.
There are better ways to shrink the deficit. One proposal by ThinkProgress raises $1 trillion over 10 years by making the wealthy pay their fair share and closing tax loopholes for corporate jets, business entertainment and horse breeding. Read the whole thing here.