WASHINGTON (AP) — Washington’s protracted budget stalemate could seriously undermine the economy and stall gains made since the recession, exasperated governors said Saturday as they try to gauge the fallout from impending federal spending cuts.
At the annual National Governors Association meeting, both Democrat and Republican chief executives expressed pessimism that both sides could find a way to avoid the massive, automatic spending cuts set to begin March 1, pointing to the impasse as another crisis between the White House and Congress that spooks local businesses from hiring and hampers their ability to construct state spending plans.
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<< massive, automatic spending cuts >>
Only in political reality bubble can one consider spending more money than last year as a "massive spending cut."
When the sequester was being debated in the summer of 2011, the CBO estimated what the impact of the bill would be on the annual federal deficit. Were the sequester not enacted, and everything else remain unchanged, the annual federal budget shortfall would be grow by $1.7b in 10 years (i.e. the annual deficit will double). Anyone care to guess what the annual federal deficit will be with these "massive cuts" in place after 10 years? The CBO said the annual deficit would grow by $1.6b.
For all intents and purposes these cuts are meaningless. We will be spending just about as much with them as without, and we are so far away from having our fiscal house in order it's truly frightening.
You really are that clueless as to how the budget works? You apparently have no idea what the relationship between long term debt and short term debt actually is or is not. Do you have any idea on how the "long term" debt is computed or do you just simply accept the numbers that are thrown at you by FOX or MSNBC.
We in fact as both CBO and leading economists on the left and right have pointed numberous times but the media likes to brush over it, easily within reach of straightening out our fiscal problems. The numbers are not hard at all. The politics at the moment are impossible and your 85 billion does nothing for the long term debt except possibly making short term debt even worse due to economic contraction.
I'm going to enjoy wathcing you zealots suffer on both sides of the aisle. You deserve it for failure to understand or to even try to get beyond the politics of the situation.
@attaturk, why don't you leave aside the insults and try addressing the issue like an adult.
As for knowing how a budget works, I've got plenty of professional experience in that regard managing a annual cost base in excess of $100m. Though anyone who has managed even a family's household budget should know the difference between a cut in expenditures and simple reduction in the growth rate of spending. The sequester is not a budget cut in any meaningful sense, and to describe as such is either wrong or disingenuous.
As for economic contraction, you're actually on to something there. GDP growth is the path toward balancing the budget. But look at our track record over the last 30 years. During that time we have seen two of the largest periods of economic growth in our history and a third, smaller growth period (mid 80's, mid 90's, and mid 00's, respectively). Yet the debt continues to grow and is now approaching the business end of a hockey stick graph relative to GDP. The last four major economic cycles demonstrate that growth alone is not the answer.
The problem is spending, and if you think we're having problems reducing spending when economic times are tough, like now, ask yourself this question: what is likelihood of Washington bringing spending under control during an economic boom when tax revenue is flowing freely into the Treasury? It's not going to happen. Now is the time to freeze federal spending levels and leave more wealth in the private sector where it has a far better chance to grow.
It is quite time enough for the states to take back the rights and responsibilities seized by Washington over the years. Local and state government....local and state responsibilty and accountablity is long overdue.
TP BS. Which has nothing to do with reality of governing. They should teach the states a lesson. Let one state off the hook for all federal income tax and withdraw every dime the state gets from the feds. I know impossible, but you'd be paying state taxes that would make your income tax look like chump change.