We are now in Day 10 of the governmental sequester, and so far, there seems to be few signs of ill-effects in the economy. In fact, just yesterday the Dow Jones posted gains for the nonth consecutive day, something that hasn't occurred since 1996. But how long will America be able to function with a handicapped government?
"Washington cannot continually operate under a cloud of crisis. That freezes up consumers," remarked President Obama. "It gets businesses worried. We can't afford these self-inflicted wounds."
For those who don't know, the government's sequestration is the result of Congress' inability to come to an agreement on around $1 trillion in budget cuts. That's right, $1 trillion is just what we're trying to shave off the top of a government's expenditures that has led to a public debt currently sitting at around $16.7 trillion. That of course, is not to mention the totality of public and private U.S. debt, which is over $59 trillion now, but I digress.
The government sequester was implemented as a sort of 'doomsday device' by politicians to ensure that they would be able to reach an agreement about budget cuts, and in theory, was a good idea. It would instantiate a governmental lock down and immediate budget reduction should the point of sequester be reached, and if the sequester goes on for too long, then a complete governmental shut down would take place.
Just when would a complete governmental shutdown take place, you may ask? March 27 is the date, just a little less than two weeks from now. So far the economy hasn't so much as blinked at the sequester, but that can't last forever. Given the prospect of a governmental shut down, wherein only essential public services would be provided until Congress can come to an agreement, there would seem to be no way Americans could be anything other than panicky . Financial analysts certainly seem to think so.
"This upcoming deadline on March 27 could be another hurdle for the financial markets," Gary Thayer, chief macro strategist for Wells Fargo Advisers.
The government has shut down before, most recently in 1996. With this most recent shut down, it is estimated that up to 700,000 jobs could be lost by the end of the year. Of course, all of this is just speculation, but still, it is something to keep an eye on. With a national debt that only seems to rise, mixed with a Congress that simply cannot get along, it is safe to say that the future of our nation is in doubt.
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