Leave it to my favorite mouthpiece to put things into perspective: according to the Washington Post those sequester cuts starting March 1st are really going to hurt, pushing the economy into another recession (another?) and costing 700,000 jobs.

Here’s what WaPo wrote:

The deal requires the government to dramatically trim spending on a wide range of domestic programs, including education as well as research and development. It would lead to the furlough of thousands of workers, officials say. And it would also sharply reduce spending at the Pentagon — a prospect that would help stabilize the federal debt over the next decade but that also creates deep anxiety among leaders.

Let’s parse that: “dramatically trim spending” on a “wide range of domestic programs” which will lead to the furlough of “thousands of workers” according to some “officials.” Sequester would also “sharply reduce spending” at the Pentagon. Whew! That sounds like Washington is finally coming to grips with reality!

Except that the sequester cuts are about $1 trillion – over ten years. Which is about, in round numbers, $100 billion a year. Out of a federal budget of $3.7 trillion? My calculator says that’s – ready? – a dastardly dramatic draconian unforgivable unconscionable cut of – 2.7 percent. Wow! I never knew!

And as for those workers that will be laid off? Some “officials” are suggesting the cuts will cost thousands of jobs. It’s true because WaPo says so, quoting those “officials”:

Macroeconomic Advisers, an independent economic group, said Tuesday that sequestration would cost 700,000 jobs and push the unemployment rate a quarter of a percentage point higher than it otherwise would have been.

The group said in its analysis that the cuts would be a significant economic hit, given that have already gone up this year and “with the economy still struggling to overcome the legacy of the Great Recession.”

Leave it to my friend Russ Roberts to replace that quote from WaPo with something a little more realistic:

Here is what the Post should have written:

Macroeconomic Advisers, an independent economic group (that leans and interventionist but isn’t part of any political party, explicitly at least) said Tuesday that sequestration could possibly lead to 700,000 fewer jobs if all the necessary assumptions and relationships observed in the past turn out to be true. Economic groups such as the Congressional Budget Office and other forecasting firms that used similar models to forecast the future were unable to predict the Great Recession or accurately estimate the of the stimulus package of 2009. But maybe they will be right this time.

We’ve got to keep an eye on these guys. They do tend to go on.


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