Failing to negotiate out of sequestration, America joins the austerity club
It has been nearly two years in the making. What started out as part of the budget control act of 2011, later morphed into the fiscal cliff just two months ago and has now turned into the “Sequestration Order for Fiscal Year 2013.”
President Barack Obama signed the sequester order late on Friday effectively cutting $85 billion from the federal budget this year. The effects won’t be felt overnight, but in the coming weeks and months we can expect up to 700,000 government jobs to be lost. Half the cuts will come from an already over-funded military, but the other half will be spread evenly through every government agency and will affect education, job training, health care, etc.
These automatic spending cuts were intended to be so damaging that Republicans and Democrats would be forced to replace it with a well-thought out deficit reduction plan. Well, two years of negotiations later and no deal has been struck and naturally both sides blame the other.
Democrats have argued for years for a balanced approach of spending cuts with more tax revenue, Republicans meanwhile have demanded deep spending cuts to social programs with no new taxes. The GOP seems to think taxes were raised enough in the fiscal cliff deal that saw the Bush tax cuts expire. However, Obama has not asked for further tax increases per se, he has simply asked to close tax loopholes for corporations and the wealthy.
Keep in mind, since the budget control act in 2011, the budget deficit has already been reduced by $1.5 trillion over ten years. Only 25% of the budget cuts over that time have come from revenue increases. Any Republican claim that spending is out of control is simply false. Under Obama, government expenditures have grown at its slowest pace since Eisenhower and the debt is close to being stabilized as a percentage of GDP.
Since Obama was first elected, Republicans and in particular Tea Party conservatives have claimed that reduced spending would spur greater economic development. They have been unwilling to settle for one penny of increased revenue and have refused to compromise with Democrats at every turn. It’s safe to say if Republicans had their way; austerity would be an American way of life.
It’s been truthfully understood that conservatives don’t pay mind to facts, science, or history. Evidently that includes present history. How House Republicans could cheer their leader for standing his ground and allowing sequestration to take place is beyond my reason of understanding. They’ve obviously never picked up a newspaper or watched a real news program (no, Fox doesn’t count as real news)
Unless you’ve lived under a rock for the past four or five years, you have seen the damage austerity can do in Europe. Greece, Spain, Italy, Ireland and the United Kingdom have all suffered greatly under austerity measures.
Since implementing self-imposed austerity, the United Kingdom has fallen into a double-dip recession and has seen slower growth than during the great depression. Greece and Spain has seen great depression-like unemployment numbers which are even worse among its youth.
Cuts in social programs in many of these countries have left countless people without access to healthcare, welfare and affordable education. In Greece’s case, forced austerity has led to the rise of radical political parties not unlike the Nazis of the 1930s.
Austerity hasn’t been exclusive to Europe of course. In Canada, after a year or two of increased spending, the first Conservative budget of their Majority government called for the layoffs of nearly 20,000 government workers. It also included cuts to environmental protections, food inspections and the CBC, they even rose the retirement age to 67.
The austerity measures in Canada are very modest compared to those in Europe, but that just means it has had a modest negative impact. If it weren’t for Canada’s oil revenue, our economy would have gone from sluggish to a standstill. Despite promising to balance the budget years ago, Stephen Harper’s Conservatives have not come close (I’m sure those corporate tax cuts didn’t help). In fact, no country practicing austerity under economic duress has managed to lower their debt.
If the United States lived in a bubble, my concern over their budget cuts would be replaced with apathetic laughter. Unfortunately we all know that’s not the case, what affects the US always trickles up over the border. When these cuts start to slow down their economy further, you can be sure it will throw a wrench in ours.
The one lesson lost on Republicans through all this is no country has ever cut their way to prosperity. Why do they believe they can be the first?