Wednesday, February 27, 2013
Are You a Naive Rube when It Comes to the Sequester?
Bob Wenzel
Gary North explains:
We have heard about the trillion dollars in automatic spending cuts. It’s headline news.
That’s part of the decade flim-flam. The government always reports one full decade’s cuts. But it never, ever mentions in these reports regarding the Congressional Budget Office’s estimate of total federal spending over the decade: $47 trillion.
You mean that the proposed trillion dollars in cuts are 2% of projected spending? You’ve got it.
This assumes that there will be cuts. There won’t be. There will be automatic add-ins that will offset any cuts. How large are these add-ins? About $110 billion more than the proposed cuts. Forbes reports:
- The sequester has been advertised as “cutting” discretionary spending
over a ten year period by $995 billion. After inflation adjustments and
exempting more than a trillion dollars of defense and non defense
discretionary spending from the sequester, the CBO projects (in its Table
1.1) discretionary spending to increase by $110 billion over the decade.
There is no actual $995 billion cut after the CBO applies its magic
adjustments. Rather there is a $110 billion increase.
The politicians assume that the financial media will go along. This usually is correct.
http://www.economicpolicyjournal.com/2013/02/are-you-naive-rube-when-it-comes-to.html --
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