Wednesday, January 30, 2013

Well yes, it's the uncertainty

So not exactly spelling doom forever, but troubling to see GDP dropped 0.1 percent in the last quarter of 2012. Part of the reason is cyclical. Fiscal years ends in the third quarter and the Pentagon has to give back whatever they didn't spend. So they go a wild spending spree to protect their funding. And of course they don't spend in the last quarter because they're out of money.

But this time the swing was bigger than usual. I have no doubt this is why:
Another possibility, as Michael O’Hanlon of Brookings told me, is that the Pentagon has been preparing for the sequester budget cuts that had originally been scheduled for January. (They’ve since been pushed back until March.) The Defense Department was facing the prospect of losing money that had already been budgeted over multiple years but hadn’t been spent. That led to a big spending spree in the third quarter, which was followed, inevitably, by a drought in outlays in the October through December.
You'll recall the sequester remained a possibility until the last possible minute in the 112th session because of GOP dithering in the House over taking the economy hostage again. In the weeks leading up to yet another 11th hour dodge, I read at least dozen articles about defense contractors laying off workers in anticipation of the sequester actually happening. Of course they have to prepare for it because no one knows when or if the GOP will be able to control their crackpot caucus.

So yes, Jay Carney rightfully blamed Republicans. Would have been nice if Zeke had mentioned that instead of simply transcribing Boehner's passing the buck.

I would have settled for him asking Boehner's office to name the two bills the GOPers passed with all those alleged "common sense cuts and reforms." Even a link to the bills, if there's no room to recap what's in them would have helped. Of course, it's against the rules of "both sides" journalism to mention the bills did not authorize "common sense cuts and reforms" but in fact were crackpot con jobs designed solely to fool the rubes.

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