Saturday, February 23, 2013

Sequestration Games ... Heads President Obama Wins; Tails Americans Lose

President Obama seems to be talking against allowing the sequester to take effect while planning to capitalize on it politically at the same time.

It seems to be a heads-I-win, tails-you-lose approach to defeat his political adversaries, the Republicans.

The American people, as usual, are bystanders and on the receiving end of being 'sold' a bunch of crapola by the President and the rest of the Washington based political aristocracy.

Happily, however, most of We the People seem to be seeing the reality of what's happening more clearly this time. It's more political theater.

Obama Blame Games summarizes the sequestration situation thusly:

"Republican leaders suspect that President Obama's tirade against the sequester spending cuts may be motivated by a desire to blame GOP lawmakers for any economic slowdown in the spring or summer.

It's a tactic Mr. Obama has used before. For three years he blamed George W. Bush for an anemic recovery. He said the tepid economy at the start of 2012 resulted from Republicans "playing games" on the debt ceiling in 2011. He blamed the negative economic growth numbers in the fourth quarter of 2012 on "bad decisions in Washington," by which he meant Republicans in Congress who insisted on budget cuts that caused a decline in government expenditures.

On Thursday Mr. Obama repeated the doomsday rhetoric from his Tuesday press conference. The sequester cuts, he warned, will have a "negative effect on the overall economy. It's going to put hundreds of thousands of jobs at risk." He added that Republicans can't see the obvious solution—higher taxes, of course—"that is right in front of them."

The suspicion is that Mr. Obama is hedging his bets on an economy that continues to tread water. . . . So while the housing sector is currently improving, consumer spending and business investment is still weak. And Wal-Mart—the largest retailer in the world—reported a dismal start to February sales. Also, gas prices are up. The Obama tax increases may be starting to bite.

"We think U.S. earnings and GDP will come up short of current high expectations," writes economist David Malpass of Encima Capital, "and the March 1 sequester will be used as a scapegoat for weakness." He adds that it may be Mr. Obama's hard line on taxes that is bearish. "We expect the sequester to proceed," he tells his clients. "President Obama probably won't offer substitute spending cuts—it would be a bullish move to the center if he did."

It may also be a smart move politically for Mr. Obama, whose poll numbers have bumped up since the election. If the economy picks up speed, he undoubtedly gets the credit. If it stalls out, it's Republican hard-liners who are to blame."

Summing Up

Placing some control on runaway wasteful government spending would be a good thing, regardless of the motivation behind doing it.

So thank you for that, President Obama.

Now please find some more ways to stop this wasteful spending debacle and reduce the size of government, even though that's not in your "progressive" playbook.

Who says unintended consequences are always a bad thing? Not I.

Thanks. Bob.

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