3 Responses to The March 1, 2013 Budget Sequester Is Not a Major Economic Event

  1. Don says:

    I don’t understand what point this is supposed to be making. It seems to be trying to parse the exact definition of “important” or perhaps “major” which strikes me as rather pointless.

    Is that amount of GDP movement significant, is a GDP expenditure:total reduction of 1:2 higher or lower than a total decline as a result of similar contraction in housing values – those are questions worth discussing. Whether it’s “major” or not seems about as useful as arguing about whether “rich” starts at $250,000/yr or $199,999/yr.

    Removing the 1% of your budget that buys diet soda is notably different than removing the 1% that pays for your insulin.

    • Wayne says:

      Perspective onthe budget is crucial for making sound decisions. I agree 100% with you point that how the budget is cut matters. However, size is also important. A 1 percentage point reduction in a person’s salary is very different than a 10 pecentage point reduction.

      The point of the post is to provide perspective with respect to the size of the sequester relative to the size of the federal budget and the size of the economy. Relative to these benchmarks, the size of the sequester is small.

      With this perspective, one can judge for themselves whether the cuts are “impactful” or not. From my vantage point, they need not be.