There has been much made in the media about the effects of the sequestration because of the agreement between the Obama administration and Congress in 2011. The predictions of economic armageddon, caused by federal spending cuts going into place by some of our politicians, borders on outright lying.
At minimum, it is intentional fear-mongering. The cuts that are supposedly going to alter our very way of life are in the magnitude of 1.5 to 2.4 percent, depending on who you want to believe. In any case, the changes that will come from this are not going to be evident to most of us.
IN RECENT years, most federal government agencies have experienced annual increases of between 3 and 10 percent per year. If your household budget increased by 5 percent for the upcoming year, and then suddenly it was reduced to an increase of 3 percent instead, how could this decrease devastate your way of life? It wouldn’t – and these tiny cuts to the federal budget will not.
The fear-mongering and publicly displayed panic attacks, on the part of some politicians, show their incompetence and put in clear view their delusional perspective concerning how budgets and spending work in the rest of the world. Only inside-the-Beltway politicians – removed too long from the real world where 99 percent of Americans live – could be so deluded.
The politicians’ attempt to put the economy into a tailspin and play partisan politics with their dire predictions is bad for all of us. It hurts economic growth and lowers consumer confidence. Household consumer spending is about 70 percent of the U.S. economy. Hurting the outlook of consumers is not a good idea.
Admittedly, I am exposed mostly to people who own and operate private businesses. I own or have co-owned three businesses, and have been a business owner for 38 years. In the real world of private enterprise where I live, budgets are cut frequently. Businesses across the United States have instituted budget cuts in various parts of their budgets and across the board for years. In the real world of private enterprise, 10 percent cuts in budgets are commonplace and rampant.
SEVERAL BUSINESSES I know instituted 5- and 10-percent salary reductions to keep their businesses viable. At the same time, millions of hard working Americans lost jobs in recent years, and millions of other Americans have given up looking for jobs. There are more than 20 million people out of work.
I feel sorry for those who are paying the price of government overregulation and out-of-control overtaxation. The first four years of the Obama administration has produced more federal government regulations than the previous administration did in eight years. It is now virtually impossible to start a new small business and see it survive.
When you add the rising cost because of the Affordable Care Act and pressure to increase the minimum wage, you are setting up an environment in which small businesses will begin disappearing at record rates in the coming two years. While food and fuel prices are hammering consumers, in 2014 millions of consumers will be learning that they, personally, owe thousands in penalties because of Obamacare provisions. Fear over the future will bring our already-sluggish economy to a standstill. Small businesses in the United States represent half of the gross national product and, more importantly, provide about 65 percent of all employment.
CITY AND COUNTY governments, local school districts and state governments have instituted the use of furlough days, voluntary pay reductions and other measures to cut spending by 5 and 10 percent over the past few years. If teachers, police officers, firefighters, prosecutors, judges and every other kind of state and local government employee can live with slight-to-no increases in pay, or sustained cuts in pay, then why not the federal government?
While the federal government spends 40 percent more than it collects, we are supposed to feel a panic when they overspend by only 38 percent? I don’t think so. Current economic policies are
not working. Continuing on this path will spell economic doom
for our children and grandchildren.
(The writer is a local business owner, business coach and professional speaker on the subject of culture and strategy.)