Don't be deluded by government scare tactics over sequestration

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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.)

Comments (7) Add comment
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Riverman1
121388
Points
Riverman1 03/10/13 - 07:51 am
5
1
Don't Look Back

American society won’t learn about borrowing until we’ve burned the trailer steps for firewood and the Greeks have broken the Parthenon up for the stones. Look back at this era of American spending and you’ll turn into a pillar of salt.

Bodhisattva
10974
Points
Bodhisattva 03/10/13 - 09:01 am
0
5
Does Jeff spend

Does Jeff spend $4,000,000,000,000 to attack, destroy, occupy, and then rebuild other businesses? As much as some like to compare apples to oranges the government can not be run like a business.

Kramer
22
Points
Kramer 03/10/13 - 10:45 am
3
0
Most federal governemt spending of the feds is NOT doing war

Your point of view is excellent, and one that I share in sentiment.

However, the fact is, the trillions of borrowed and wasted federal government spending is mainly NOT to go invade and kill persons of other nations. I am sure that I am like many who would say that the wars in Iraq and Afghanistan were ill-conceived. War related spending is not the majority of the over-spending of the federal government. It is the hiring millions of full time federal government employees making an average of $86,000, plus benefits, that is killing us.

ultrarnr
1364
Points
ultrarnr 03/10/13 - 11:11 am
0
0
Distortion of the Facts
Unpublished

This piece is yet another complete misrepresentation of reality concerning the sequester. The CBO estimates the sequester will cost 75,000 jobs a month, cuts to border security will delay shipments coming into the country and raise prices fora lot of goods, 70,000 children will be kicked out of head start forcing lower income families to arrange expensive alternatives, unemployment benefits will be cut. This is just a short list of what will happen. These will cut consumer purchasing power. Guess what effect that will have on small business? The effects of the sequester will happen slowly and cause the most harm tothe most vulnerable in society.

Darby
39826
Points
Darby 03/10/13 - 04:17 pm
4
1
"American society won't learn about borrowing ....

until we've burned the trailer steps for firewood and the Greeks have broken the Parthenon up for the stones."

Too late... Have you seen the Parthenon lately??

Darby
39826
Points
Darby 03/10/13 - 04:25 pm
5
0
"the government can not be run....

like a business"
.

No, not in all cases, but the same common sense and rules of economy and operational efficiencies do apply. There is absolutely NO reason for a government to spend irresponsibly. There can be an excuse for it but, in the history of civilization, never a valid reason.

OJP
9732
Points
OJP 03/10/13 - 10:29 pm
0
2
"It is now virtually impossible to start a new small business

and see it survive."

Lines like this make me thing two things: (1) this is an absurd statement and hyperbole (which makes me question the veracity of every other sentence) and (2) perhaps it is time for Mr. Annis to step aside; there are likely many young, energetic entrepreneurs who are willing to take risks that he is no longer willing to take.

Darby
39826
Points
Darby 03/10/13 - 11:28 pm
1
0
@OJP - I agree that Jeff probably stepped on....

it when he made that statement. On the other hand it is much more difficult now than it was just a few years ago to start a small business and make a success of it.

The Small Business Administration reports that only 44 percent of small businesses will last into the fifth year of operations. It is admittedly tough to make a go of it and it's getting worse.

Don't know where you got the idea that Jeff is "no longer willing to take" risks. At last report, his operations were going gangbusters. He was simply lamenting the fact that small business start-ups today have it much tougher than he did "back in the day".

soitgoes
909
Points
soitgoes 03/12/13 - 02:54 pm
1
0
Bravo!

Excellent article, Mr. Annis. Simply outstanding. Why is it that no one realizes (or admits) the sequestration is not about SPENDING CUTS, but rather, has to do with limiting the FUTURE INCREASES OF SPENDING. Rein in the spending. Stop the madness!!!

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