Washington's Sequester Hysteria Obscures A More Tragic Unseen

Story Stream
recent articles

This Friday marks the day that automatic federal spending cuts will take place thanks to an incompetent political class willfully blind to constitutional limits. Though reductions on the order of $86 billion are truly microscopic, politicians and their media enablers are predictably predicting economic Armageddon thanks to a tiny cut in planned spending increases.

As USA Today put it on Monday, "Coming soon, the lines at airport security might get longer, the hours of service [horrors!] at Head Start centers might get shorter and the FBI might have fewer agents tracking down bad guys." Fearful of "fewer teachers, reduced medical care, idle defense workers and other job-killing reductions in all 50 states," our economically obtuse President in Barack Obama has naively asserted that "The longer these cuts are in place, the bigger the economic impact will become."

First, let's all relax. If we ignore that even under the sequester that federal spending is expected to soar to $5.9 trillion annually over the next ten years, the hysteria is wildly overdone.

Indeed, lost in all this talk if the economic burden that is our federal government is even slightly restrained is what it means for all of us who shoulder the aforementioned burden. Put plainly, can any reader honestly say he or she doesn't have better things to do with the income our federal minders take from us in order to run the favor factory that Washington has become? Might we have paid off loans, purchased for our basic needs, and possibly invested our disposable income in profit-disciplined companies that actually have a clue about productivity?

As for the false argument along the lines of "Who cares, China is paying for our waste," have we ever considered the tautological reality that absent all this nosebleed spending, that those dollars spent by foreigners on U.S. Treasuries would still cycle back to the U.S. (to save dollars is to lend them); only to businesses in need of loans and investments? Unseen amid all the federal jobs and programs supported by all of us (yes, the federal government is "WE"), are the companies that never form thanks to a lack of plentiful capital, not to mention those that can't continue operating thanks to the feds vacuuming up so much credit for consumption over real investment. Unseen, in short, are the Microsofts, Intels, and Googles whose productivity enhancements would enrich us, and also employ us.

Taking this further, many on the right regularly talk about dependency - on food stamps, unemployment benefits and welfare - wrought by heavy federal spending. They have a point here, and unseen is the pride-enhancing work success that Leviathan takes from those who choose government handouts over economy-boosting work. The seen here is people doing little to nothing, while the unseen is the real work they would be doing if the need to survive and feed one's family forced the unproductive to find jobs. If the feds were taxing and spending less, private sector companies would have access to more funds to expand and create real employment the markets actually desire.

Of course too many on the right ignore the other sick-making dependency that is all too apparent to anyone living in Washington, D.C. The capital's suburbs are full of some of the highest average incomes in the U.S. Sorry, but dependency on government isn't just the property of the poor; rather it's arguably bigger among middle and upper middle class earners fully reliant on a bloated federal budget.

Unseen here is what these arguably talented individuals would be doing if they too weren't taking part in the false enjoyment that is near permanent federal employment. If laboring under the frequent stress that defines always uncertain private sector employment, there's no telling what today's federal salary takers might be achieving. The seen is the comfortable lives of Washington bureaucrats, but the unseen concerns what they might be doing in a more dynamic world marked by success and failure. We hear about jobs that will be lost should federal spending decline, but we never hear about the jobs never created thanks to all the spending; the latter robbing individuals of the success and dignity that comes from working in a profit-motivated private sector.

What this tells us is that the political class must grow up. For the left who think any reduction of the myriad federal programs is tantamount to cruelty, they must ask themselves if it's not exponentially more cruel for the federal government to addict the unsuspecting to handouts that are barriers to the realization of the potential that exists within us all.

As for the right, it's no longer credible as so many conservatives claim that minor cuts in our defense budget ensure much greater weakness in same such that defense costs will soar down the line. Instead, the right need to soul search, all the while asking themselves if our national defense is truly enhanced by military bases in 175 countries around the world whereby we pay for the defense of some of the richest countries in the world. It's quite simply not realistic that all of this largesse makes us safer, and then with dependency in mind, it's hypocritical for the right to addict so many able-bodied to a federal paycheck that ultimately robs them of their ability to make the most of their lives.

Back to the looming sequester, it's surely embarrassing that we're led by political types so deluded with their importance that they think we can't survive absent their dollars. Lost on them, and sadly by too many of us, is that those dollars are ours. In that case we must learn to love a sequester that has the living, breathing definition of dependency - Washington, D.C. - so on edge. Indeed, it's time for us all to get to know the beautiful unseen that would reveal itself amid a reduction in the certain austerity that is big government.

John Tamny is editor of RealClearMarkets, Political Economy editor at Forbes, a Senior Fellow in Economics at Reason Foundation, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). He's the author of Who Needs the Fed?: What Taylor Swift, Uber and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank (Encounter Books, 2016), along with Popular Economics: What the Rolling Stones, Downton Abbey, and LeBron James Can Teach You About Economics (Regnery, 2015). 

Show commentsHide Comments

Related Articles