This year we are supposed to cut $85 billion from a $3.5 trillion budget. And it won’t even be that much. According to the Congressional Budget Office, the federal government won’t be able to cut the full $85 billion. It will manage to cut only about half that in 2013.
As Yuval Levin of the journal National Affairs points out, even with the sequester, the federal government will spend a little more in 2013 than in 2012, $3.553 compared to $3.538 trillion. Welcome to the Age of Austerity.
Even with the sequester, nondefense discretionary spending will still be up almost 10 percent since 2008. Even with the sequester, federal spending is projected to be a robust 22.8 percent of gross domestic product in 2023. Even with the sequester, the debt will hit 100 percent of GDP just two years later than it would otherwise, according to the Bipartisan Policy Center.
It’s hard to see how a cut of a little more than $40 billion this year can possibly tank a $16 trillion economy. Or why keeping the deficit the same it is projected to be this year, at about $845 billion with the sequester cuts already accounted for, will be a shock too severe for the economy to take.
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