Automatic Budget Cuts Would Trigger Massive Job Losses

From Fox News :

Automatic cuts in federal spending will cost the economy more than 2 million jobs, from defense contracting to border security to education, if Congress fails to resolve the looming budget crisis, according to an analysis released Tuesday.

The study, obtained by The Associated Press, was conducted for the Aerospace Industries Association, but it examined the shared pain for defense and domestic programs from the across-the-board reductions slated to kick in Jan. 2. The cuts would reduce the nation’s gross domestic product by $215 billion next year while consumer confidence would plummet, said the report by Dr. Stephen Fuller of George Mason University and Chmura Economics and Analytics.

“If they are allowed to occur as currently scheduled, the long-term consequences will permanently alter the course of the U.S. economy’s performance, changing its competitive position in the global economy,” said the report.

Ask anyone in the defense industries, job losses and cutbacks are already occurring. The automatic cuts would only accelerate that trend.

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  • GarandFan

    “while consumer confidence would plummet”. Future tense? According the the last 3 months data, it’s already dropping.

  • http://www.rustedsky.net JLawson

    Interesting conundrum, isn’t it?

    If you cut back governmental spending, you’re going to lose jobs.

    If we don’t cut back governmental spending, you’re going to lose jobs anyway when the money runs out and the government turns the monetary standard into a hyper-inflationary even like Germany in the ’30s, and can no longer afford to pay its workers even in worthless currency.

    So the question is – would you rather have a kick in the nuts now, or a kick in the nuts and your throat cut later?

    • GarandFan

      Here’s a thought! Let’s raise taxes on “the wealthy” just like the French did. Barry, loving all things European, should readily buy into it. It’s not like “the wealthy” would just pick up and move.

      http://www.telegraph.co.uk/news/worldnews/europe/france/9404209/Frances-proposed-tax-hikes-spark-exodus-of-wealthy.html

      • http://www.rustedsky.net JLawson

        The Berlin Wall wasn’t put in place to keep people from coming IN, after all.

        I wonder how long it’ll be until California seals its borders to prevent folks from moving their businesses out? Or imposes a massive ‘departure’ tax?

        Probably shouldn’t give ‘em any ideas… :-(

        • Vagabond661

          They would need to sell it as a penalty…

          • http://www.rustedsky.net JLawson

            Like I said – don’t give them any ideas.

      • Commander_Chico

        The USA would have to go a long way to raise taxes to what rich French have now.

        You also can’t escape the IRS totally just by moving – you have to renounce your citizenship.

        If they just revoked the Bush tax cuts for the wealthy it would go a long way.

        • GarandFan

          And just how much would the government gain with Obama’s “tax the wealthy”?

          • http://www.rustedsky.net JLawson

            Probably not enough to cover the paperwork required to collect it. (That’s what happened with the ‘Luxury Tax” in the ’90s. People WANTED to buy the things that were taxed – but they didn’t NEED to. Lot of boat builders darn near went bankrupt, and both Beech and Piper barely survived.)

          • GarandFan

            I was hoping Chico would know. It’s not hard to find out. But considering the amount of the deficit, it’s easy to understand why Barry doesn’t define “fair” or what amount he hopes to get out of his tax increase.

          • http://www.rustedsky.net JLawson

            Why would you tell the mark just how much the scam is going to cost him? Just hold out the promise of a big payoff, and you’d be surprised how much you can bilk people for.

            (Say, anyone see my Publisher’s Clearing House letter? I might already be a winner – all I’ve got to do is get a couple of magazine subscriptions!)

        • http://www.rustedsky.net JLawson

          chico – “If they just revoked the Bush Tax Cuts for the wealthy it would go a long way.”

          No, not really. Revoking the Bush tax cuts would bring in probably $200 billion. That’ll cut the deficit from $1.5 tril a year to $1.3. tril.

          The problem doesn’t seem to be solvable unless there’s a massive cut in spending. Without that, the powers-that-be will go “Okay, we’re getting $200 billion more, now we can spend $200 billion more, and still keep the same amount of deficit spending.”

          As far as escaping the IRS goes – when the cost of staying American (ex-pat taxes and the such) exceeds the benefits – then the IRS will lose their hold on the rich.

          Either that – or the rich will have their lawyers print out a copy of Eric Frank Russell’s story “And Then There Were None” – and a button with “F=IW” printed on it. Then send it to the IRS and wait to see what they do.

          http://www.abelard.org/e-f-russell.php/

          • jim_m

            I’ll bet that $200B estimate does not take into account the likelihood that the wealthy would change their behaviors to reduce their tax liability, in which case that $200B becomes a lot smaller.

          • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

            Up to and including taking their money and their selves elsewhere.

          • http://www.rustedsky.net JLawson

            That was the estimated loss if the economy improved.

            Now? I don’t think it’d get $150B.

          • 914

            The economy cannot improve unless the impostor is removed from office..

        • retired.military


          If they just revoked the Bush tax cuts for the wealthy it would go a long way.”

          A long way towards what? You get another few billion for Obama to give to his buddies that run green companies which go bankrupt.

          You could double the amount of tax revenue generated from everyone in the top 25% of taxpayers and you will still not cover the deficit for any ONE YEAR of the Obama administration.

      • http://www.facebook.com/people/Jack-Zimms/100003653414389 Jack Zimms

        @GarandFan

        Actually, the wealthy can get up and move and many have. It
        is the poor and middle class that can’t easily move. Therefore, by your logic,
        they should be ones that are tax and their government benefits cut.

        • GarandFan

          My logic? I think you’d better re-read what I wrote.

          • http://www.facebook.com/people/Jack-Zimms/100003653414389 Jack Zimms

            Sorry, it gets hard to tell when people are being sarcastic
            now days. I have actually heard liberals using that argument while being serious. Even live it is hard to tell. I had a liberal state that Obama hasn’t run up the deficit during his term. I thought he was joking at first but he wasn’t.

  • Guest

    Will the Republican leadership in the House ignore the will of the people and instead protect the interests of the rich?

    The latest reminder comes in a Pew Research Center poll that takes apart the basic tax debate—the debate President Barack Obama teed up last week by resurrecting and repackaging his long-standing position that low tax rates should be extended for middle-class taxpayers while taxes are raised on families making more than $250,000 a year.

    The new Pew survey finds that by about a two-to-one margin (44% to 22%), Americans say they think the Obama idea of raising taxes on those wealthier families would help the economy. Also, Pew notes, “an identical percentage (44%) says a tax increase on higher incomes would make the tax system more fair, while just 21% say it would make the system less fair.”

    http://stream.wsj.com/story/campaign-2012-continuous-coverage/SS-2-9156/SS-2-33838/

    • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

      DERP!
      Democrat Controlled Senate has not passed a budget during 0bama’s term.
      DERP!

      • http://pulse.yahoo.com/_IZ5BM5GNLA54OADSWGSXAMA7SY Jay


        Democrat Controlled Senate has not passed a budget during 0bama’s term.

        Funny, I could swear that means Republican obstructionism has done its job then. Tell me… What are the filibuster rules again?

        • http://www.rustedsky.net JLawson

          No Democrats voted for the budget that Obama came up with.

          Looks like a bi-partisan effort, to me…

        • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

          There is NO veto on budgetary matters (which is how the PORtax got through). Dingy Harry hasn’t even allowed a floor vote on budgets passed by the house.

          That beam in your eye looks really painful, btw. You might want to see a doctor about it before they all pack their bags and leave the country…

        • Evil Otto

          Someone apparently DOES need to tell you the filibuster rules, leftist drone. Budgets can’t be filibustered… spending bills can be, but not budgets.The Democrat-controlled senate could pass a budget tomorrow, and there wouldn’t be one damned thing the Republicans could do to stop it.

          You did know that, right? Of course you didn’t. Find another excuse for your Democrat masters.

          • http://pulse.yahoo.com/_IZ5BM5GNLA54OADSWGSXAMA7SY Jay

            No they can’t pass a budget tomorrow. Republicans would fight it tooth and nail and it wouldn’t pass the House. Fox News told why:

            KYL: You mentioned the possibility of a continuing resolution. Why would Congress have to pass a continuing resolution? Because the Senate Democrats now, for the third year in a row, will not have passed a budget. That’s their job.
            The House Republicans have passed a budget. Senate Democrats said no to that budget. So I think it’s very unfair to suggest that Republicans are responsible.

            We don’t have the votes in the U.S. Senate. But where they do have the votes, in the House of Representatives, they’ve done their job.
            BAIER: Senator Durbin, why haven’t the Senate Democrats passed a budget?
            DURBIN: It’s called 60 votes. And what it boils down to is this: we have 53 Democratic senators.

          • jim_m

            It comes down to the fact that even the dems don’t want to vote for obama’s budgets.

          • Evil Otto

            That is it exactly, Jim. The reason the Democrats don’t want a budget is because they would be on record as voting for this economic train wreck. their opponents would be able to claim, rightly, that the Democrats were responsible for the “orgy of spending” (to quote Obama, when he was running for office and pretending to care about deficits).

          • Evil Otto

            Durbin is full of sh**, and so are you. BUDGETS CAN NOT BE FILIBUSTERED. Those are the rules, Democrat mouthpiece, and they have been in place since 1996. Quote all you like. Whine and complain all you like. Spin all you like. I spoke of the Senate, and you know it.

            Budgets can not be filibustered, whether “Dick” Durbin agrees or not. 53 Senators could pass a budget any time they liked. After that, if you wanted to whine that mean ol’ Republicans were stopping the noble and pure Democrats from creating a final budget to be passed by both houses and signed by your Glorious Liege King Barry I, you’d be free to do so… and you might actually be able to make a point.
            Let me quote “Dick” Durbin, since you brought him up. He was being interviewed by Joe Scarborough:

            Scarborough: “But that doesn’t stop you and your budget committee from producing a budget. To produce a blueprint to say this is the Democratic vision for America’s future. And that hasn’t happened in over 900 days.”

            Durbin: “I can’t argue the point.”

            And let me point out, leftist drone, that the Democrats at one point had a filibuster-proof majority in the Senate, control of the House, and the Presidency, and they still did not pass a budget. What’s your excuse for that, mouthpiece? Did the mean ol’ Republicans glare at them too hard and make them feel bad?

            C’mon, Jay, give this up. Stop making excuses, you little hack.

          • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

            Well said.

          • herddog505

            Man, that’s out of the park and still heading for orbit!

            Well done.

          • Evil Otto

            Thanks. I’m not expecting a response from the little coward.

          • Jwb10001

            There’s also that small point of them having 60 votes for 2 years of Obama’s presidency.

          • Evil Otto

            No reply, eh drone? You’ve been crawling all over this blog, replying to anyone who will pay you the attention your empty life needs, but I’ve proven that there is no reason that the Senate has not passed a budget except that Democrats do not want to do so. Your response?

            Silence.

            Come on, mouthpiece, let’s see you weasel your way out of this. Tell me again why the Senate Democrats haven’t passed a budget. Blame it on Republicans. I want to see you try.

          • retired.military

            Jay

            Why cant the senate Dems compromise enough to get 7 Republican votes?

            Why cant the senate Dems even bring the House version of the budget up for a vote?

            Why is it whenever compromise is discussed the left want the republicans to compromise and not the dems?

          • retired.military

            Jay

            https://www.google.com/#hl=en&output=search&sclient=psy-ab&q=how+many+votes+to+pass+budget+in+senate&oq=to+pass+budget+in+senate+&gs_l=hp.3.0.0i22.0.0.1.7.0.0.0.0.0.0.0.0..0.0…0.0…1c.-4VqjgVLFsI&pbx=1&bav=on.2,or.r_gc.r_pw.r_qf.,cf.osb&fp=96c42963bb9ff947&biw=1366&bih=599

            There is about a gazzillion links there stating 51 votes needed for Senate to pass a budget and also pointing out that the dems are lying through their teeth when they say they need 60. This includes Obama’s former budget director Mr Lew and Dick Durbin..

        • retired.military

          Jay

          Seems to me that in the first 2 years of Obama’s administration the dems have an overwhelming majority in the House and a filbuster proof majority in the Senate.

          That address Year one and 2. Now lets address year 3.

          That is the year the republicans sent a budget to the Senate and Harry Reid has refused to let it come up for a vote.

          So much for republican obstructionism.

          Obama did do one thing though. he got the Senate 3 times to vote down his budget with no votes from either party.

    • http://www.rustedsky.net JLawson

      It does show how many folks don’t have a clue when it comes to taxes and the economy…

      • Sky__Captain

        I beleive Grumpoy is just following his Choom-Messiah’s talking points. After all, that’s all Grumpy has…

        • http://www.rustedsky.net JLawson

          God help us…

          • Evil Otto

            In Grumpy’s world, there is no God, there is only Barry.

    • 914

      250,000 a year in a city like New York is equivalent to 25,000 a year where I live.

      It is not rich and if your hero has his way, we will all be bowing to this waste of life Government..

    • retired.military


      Will the Republican leadership in the House ignore the will of the peopl”

      Here mr Lying Chickenshit BUillshitter let me fix that for you

      “Will the Obama administration ignore the will of the people and not repeal Obamacare?”

      See Mr Lying Chickenshit Buillshitter.

      You want to bring up the will of the people when you think it supports your arguments but then totally ignore the will of the people when you dont like what they have to say. Its the liberal way.

      • Jwb10001

        Obamacare a piece of legislation rammed thru with a simple majority in the Senate using a gimmic under the BUDGET process which as has been pointed out, requires only a simple majority … wonder what Dick Dubin would say…

  • http://www.facebook.com/people/Jack-Zimms/100003653414389 Jack Zimms

    Red herring. There are basically two questions. One is do
    you trust the Government or the Private sector to spend money wisely and
    productively? Second question is can any entity even the governments keep
    running up massive debt without terrible consequences?

    IMO if the government
    gets their fiscal and policies matters in order, the private sector will boom.
    Consumer confidence will go way up not down. Even if it meant a temporary
    reduction in the standard of leaving, it would result in sustainable standard
    of leaving instead of going bust, which is where we are heading now.

    If all you want is jobs, hire half the unemployed to dig
    holes and the other half to fill them. That wouldn’t produce anything and would
    only result in redistribution of wealth from the productive to the
    unproductive. Socialism doesn’t work very well.

    Also I suspect there was political influence on
    this so called “study”.

    • http://www.rustedsky.net JLawson

      Uncertainty is a business killer. As you point out, the government needs to get their fiscal house in order, which is hard to do when executive whim is substituted for settled law.

      What we’re looking at is government expansion for government’s sake – not to provide a solid framework the civil economy can build upon.

  • http://www.facebook.com/people/Jack-Zimms/100003653414389 Jack Zimms

    Also Obama acts like automobiles were invented due to the government paving roads instead of paving roads due to the needs of automobiles.His causes and effects are all mixed up. Yes, the needs of the DOD help create the internet.
    However, it was the private sector that took the technology and exploited it
    for capital gain. The government didn’t hire Gates, Jobs and others to do what they did. The government did not build their businesses for them. They took discovered technologies and use them improved them and created many of their own.

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