Rename the sequester: Suggestions
What’s in a name? There’s got to be a better one for the ‘sequester’ cuts that are set to roll out beginning March 1, if Congress doesn’t act in time. Speaker of the House John Boehner is using “Obamaquester;” Marketplace listeners have their own lists going.
Names aside — how much of an impact will the sequester have on our economy?
“The fundamentals of the economy actually look pretty good…well, they would look good if it weren’t for the politicians,” said Fortune magazine’s Leigh Gallagher. “We were really kind of gaining a lot of momentum on this recovery — certainly if you look at the stock market, that’s a completely different story. But these budget cuts, I’ll call them, are not going to be good on top of the tax increase — the payroll tax increase had already had an impact,” she said. “I think the uncertainty…that’s going to impact everything.”
CNBC’s John Carney, though, said he believes everything will be fine. “The actual budget cuts only amount to around $44 billion; it’s not a lot of money,” he said. “So we can easily take it, even at the full number of $85 [billion], we could take that. Our economy is strong enough right now that it turns out that you know, maybe this whole — I won’t use the ‘S’ word, I’ll call it ‘March Madness’ — isn’t such a bad idea.”
Listen to the full audio above for more analysis on the sequester. The two also offered some good reading for the weekend ahead.
Leigh Gallagher’s picks:
- Time Magazine’s special report on health insurance: “Why medical bills are killing us”
- A NYT op-ed on better productivity (hint: relax!)
- From the wayback machine, a 1987 look at the Vatican’s finances by Shawn Tully that Fortune re-ran last week
And John Carney’s suggestions:
- Crunch Time: Fiscal Crises and the Role of Monetary Policy. New paper from David Greenlaw, James D. Hamilton, Peter Hooper and Fred Mishkin that argues that debt becomes a problem when it reaches 80 percent of GDP
- Here’s a cheery thought: We’re underestimating the chance of human extinction, via The Atlantic
- Crown jewel lock-ups (Harvard Law School Forum): A new era of M&A is seeing the return of an old and controversial form of deal protection
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