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| "Sorry President Obama, but you're too late!" |
The result of the cuts would have dramatic consequences for the economy, more likely than not. The Republicans are worried about the cuts giving too much power to President Obama's administration, spending money without any of their input or consensus. Some Republicans also fear President Obama will use this opportunity to shift money and help his health care plan, which they obviously have no great love for. Politico quotes Mike Simpson as saying that "One of the things that they mention is that we've been able to control spending in Obamacare, and if we give [the White House] flexibility, they may fund all these parts of Obamacare we don't want to fund." It is quite disheartening that even in such a crisis, politicians still have a tendency to focus on things like Obamacare instead of hurriedly working out a bipartisan solution. Pew isn't helping either. But then, we can't say we aren't used to this.
President Obama himself is not too happy with the way things are going. He fully expects that these cuts will cause businesses to "tumble downward." Of course, his concerns are not going to prevent the probable budget battles that are erupting even before Friday. Fiscal gridlock is not a pleasant idea. However, John Boehner and President Obama have come no closer to finding a final deal than before. The New York Times quotes Stan Collender for saying that "I don't think there's a grand bargain out there - not this year, not next year, maybe not until after 2016."
Well that's certainly a depressing thought. I think we should be prepared for the worst. What do you think is going to happen? Will a miracle allow Democrats and Republicans to suddenly work together? How will the rest of the world respond? I doubt Adam Smith saw this coming when he first described the market system.
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3 comments:
Desperate times call for desperate measures, but it seems like both parties don't want to take those desperate measures. It seems like each party is being too self-centered, not relenting just a bit to save the nation from further economic crisis. At this rate, I think the sequester will happen and a lot of people will be out of work. Furthermore, we may see a little rolling back of the government due to less money.
I agree with what Marvin said. I would add that the parties probably aren't taking "those desperate measures" because it would not be significantly beneficial to them to be the one responsible for future economic problems caused by the cuts. Also, it gives them the chance to play the blame game amongst each other, as usual.
Another thing to worry about is a possible government shutdown.
On the other hand, US stock rose moderately on Friday, with Dow going up 35 points. The investors seem not as concerned with the spending cuts, and express that the budget cut "is not something that will make us fall off the cliff, since the cuts will be worked in relatively slowly." Even Obama acknowledged that it would take a while before the effects of the cuts kick in. In response to the idea of "desperate time" discussed above, I think both parties evidently do not consider the situation as particularly "desperate" at the very moment. Yes, some less important, obscure program would be unfortunately cut as of now. However, a bipartisan effort to solve the fiscal crisis is not going to take place until an average American actually can substantially feel the pain of the cuts. As a result, I guess the two parties probably feel that they still have ample time for negotiation and hesitates to go to the negotiation table right now so they could get the most out of this.
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