Saturday, October 19, 2013

The slow motion shutdown of America

David Dayen has a great piece on how the last GOP shutdown extravaganza was just a side show to the ongoing damage being done by the sequester:
You could argue that the recent shutdown inflicted much more damage than sequestration. You would be wrong. Standard and Poor’s estimated that the shutdown cost the economy $24 billion over its 16-day stretch. Sequestration, meanwhile, will be in place for ten years unless Congress does something, and the spending cuts over that time total $1.2 trillion—50 times the economic impact of the shutdown. And that doesn’t include the knock-on effects to the economy—reduced purchasing power by federal employees, fewer contracts for private companies doing business with the government, and generally lower consumer spending as a result. According to the Congressional Budget Office, sequestration cuts will cost as much as 1.6 million jobs if kept in place through the 2014 fiscal year, with a reduction in GDP of 0.7 percent. The continuing resolution funds the government at sequestration levels through January 15, 2014, so we’re well on our way. As veteran Congressional observer Norm Ornstein wrote, “Damaging as the shutdown is for governance, it is minor compared with the long-term damage of the sequester.”
This should, but never will be an ongoing story in BigMedia. There is a reason the recovery has been so slow and almost maliciously uneven. And it's not just the sequester, it's the whole anti-stimulus policy forced through by the austerity zealots.

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