Sequester Cuts

Sequester Cuts

It is not only easy, but also necessary, for politicians to demagogue and create a false emergency in order to spur on their policies for political gain. They always seem to manufacture one emergency after another as an excuse to either increase spending levels, or, less desirable, keep those levels the same. Rahm Emanuel, in his position as chief of staff to President Barrack Obama, famously once said, “Never allow a crisis to go to waste.”  This, sadly, seems to be the case with sequester. Austrian Economists believe that government spending does not lead to economic growth, but instead stifles that growth.  

            Suzan Davis writes about how sequester may have serious effects on a struggling economy, in her article entitled, “Sequester: 'Collateral damage' of budget war may be huge.”  In her article, Davis states that the sequester law might endanger economic growth, increase unemployment, and hurt the United States military effectiveness. Larry Kudlow in his article, “The Pro-Growth Sequester,” correctly points out that the sequester law only makes up about one quarter of one percent of the nation’s GDP.  Davis points to the White House’s warnings of devastating consequences and hundreds of thousands of federal employees being affected by the draconian cuts. How can this be? Government does not use regular accounting methods like most Americans, instead using base line budgeting, which automatically includes increases to every department’s budget each year. Kudlow states that “the sequester would slow the growth of spending. They're not real cuts in the level of spending.”

            The classical definition of insanity is doing the same thing over and over again, expecting different results. Throughout history, Keynesians state that to reduce unemployment the nation needs to spend more money. The same argument is always used for recovering from a recession. They purposely ignore that each time government has reduced spending levels and forced the size of government to shrink, there has been a boom in the private sector. It happened during the Coolidge, Reagan, and Clinton administrations.  

For anyone to state that if government reduces it’s spending and adopts austerity measures the economy will tank is a baseless argument without any concrete facts to support their argument. Friedrich V. Hayek once said that, “Emergencies have always been the pretext on which the safeguards of individual liberty have been eroded.” That statement held true then and it does today. For politicians to create emergencies as a pretense to gather more power is an abuse of the offices they hold and should be exposed for the charlatans that they are.