OK...So I Was Wrong!

Well, a couple of weeks ago when I wrote my last blog, the sequester had not happened yet. Although my last blog was critical of the “do-nothing” Congress, I ended it with the assurance that the sequester would not happen. I was sure that the irresponsible cuts that were proposed would never occur.  I just knew that the President and the Congress would reach an eleventh-hour agreement, and that we could all breathe a sigh of relief. We dodged another bullet….we avoided another cliff! Well…..I was wrong. March 1st came and went….and the sequester is here. Again….no one seems to want to do a dang thing about it.

So far, it seems that the effects have been minimal, but I think that’s how it’s all designed. The pain will occur slowly. I have not heard about longer TSA lines, or kids being put out of Head Start…at least not yet. (Well, furloughs have not really started yet) Actually, the economy….or at least the stock market has been booming.  I listen to Marketplace with Kye Risdall on my way home each evening on NPR. Kye has assured me that “the stock market is not the economy and the economy is not the stock market.”  Although he plays the “happy music” when the DOW is on the rise (which consists of older, more established companies), the NASDAQ , although not doing bad, has not really had as much of a  bounce. A report today on CNN.com points out that the DOW also rose to record heights in 2007…..right before the Great Recession.

I am no economist, but I cannot help but think that the artificial crisis, called the sequester, will not help the economy grow or prosper. As far as I can tell, it can only damage an economy that was showing signs of improvement, especially in the form of higher home values, and lower unemployment.  What we hear from Congress is that we have to slow down spending.  That may be true, but I fail to understand why the slow down cannot be a little more discretionary. I doubt if laying off defense contractors, hampering medical research, and furloughing federal employees will help the U.S. debt that much. There has to be other ways of governing the economy….without hurting folks who work for a living.

Will we avoid all of the “bad parts” of the sequester, or should we batten down the hatches. That all depends on the actions of our “do-nothing” Congress. I do know that I will avoid making any large purchases in the near future…just saying. Maybe I will be wrong again.