The wolf is at the door. The showdown is here.
The government’s draconian budget reduction program, called the “sequester,” is apparently going to begin March 1. There will be deep, across-the-board spending cuts. The Congressional Budget Offices says it will cost 1.4 million jobs in 2013, more than half of those gained last year as we were slowly growing out of the Great Recession.
At last, we will be able to test the Democrat versus Republican solutions to a recession.
What is a recession? It’s a lack of demand. People don’t buy enough stuff.
The Republicans say that the government, like a family, should tighten its belt and slow spending in a recession. But that cuts demand. The Democrats say that government spending should increase to make up for the lost demand until the economy recovers, then pay back the borrowed money.
It’s apparently not enough proof of these propositions that Europe tightened its belt after the financial crash and promptly fell back into recession. It’s not enough proof that, in the last quarter of last year, the Defense Department began spending cuts to contractors in anticipation of the sequester, an act that slowed economic growth to a halt.
So let’s shoot ourselves in the foot.
The Republican Party has been in a fact-free myth bubble for 40 years. Let’s hope this act will pop the bubble forever and the Republicans will return to the days of old when they worked cooperatively to solve problems.