'Sequester' could cripple recovery: White House

At a press conference on February 5, 2013, President Barack Obama urged Congress to take action to avoid sequester cuts with a short term budget fix.

"Unless Congress acts by March 1st," according to a fact sheet released by the White House today, "a series of automatic cuts -- called a sequester -- that threaten thousands of jobs and the economic security of the middle class will take effect."

The report lists 30 reasons why Congress should act now to ensure that doesn't happen.

"From a macroeconomic perspective, in terms of ... the overall economy, the Congressional Bugdet Office is saying that it would shave close to a percentage point off of GDP growth," said New York Times economics correspondent Catherine Rampell.

That might not sound like a lot Rampell explained, "but when you think about the fact that we've been under 2 percent growth for a while, that's actually quite significant."

"Why are we risking it?" asked Heidi Moore, the economics correspondent with The Guardian. "Maybe something bad will happen, maybe something bad won't happen, but we know how to prevent it, which is to just stop this and come to a decision about what we're going to do about the deficit."

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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Recovery? What recovery? I avoided every lay-off until mid-2009. I've been RIFd 3 times since mid-2009. And I'm not alone. I challenge anyone who wants to cut the deficit right now to be unemployed 3 times like I have been. There is NO recovery! If there were, economic conditions would not be this bad! Let the current sequester be executed and we're all going back to the dark ages.

So you have a bunch of economists on the left saying that cutting spending is bad for the economy, and you have a bunch of economists on right say it's good for the economy. The truth is that they're both right (and wrong), it will hurt in the short run, but help in the long run. Since politicians only live for the next election, they don't want to cut anything, but since the rest of us are running for an election, we care more about the future, the right answer is to cut.

It's like saying that if you stop drinking you may get a hangover, but we all know that if you try to stay drunk you'll eventually expire. So Heidi saying, "Hey why risk it, you might get a hang over?!?!?"

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