Sequester Blues

Being a small business person - as in very small - 4 employees currently - I am scratching my head about why I am spending my time scrambling to make ends meet and not lay people off while politicians constantly pontificate about how concerned they are about protecting small business.

Admittedly my business is sort of a canary in a coal mine - I am really impacted by changes in the larger economy - it usually hits me first.  That being the case I have to assume this whole sequester mess does not bode well for the overall economy.

Republicans and Democrats are both pointing the finger of blame at the other.  Both parties have their blind spots, but when I look at the objective facts of history since the second world war, I find the Republicans to be the problem - and it isn't even close.  When Republican's have controlled the agenda in Washington taxes have gone down and spending has gone up.  Consistently.  On objective history Democrats have been much more fiscally responsible when they controlled the agenda.  From 1995 when Republicans took over both houses of Congress through 2007 when they lost control Republicans were able to pursue all their pet theories of how to build a good economy.  The end result was a world wide financial collapse and an ongoing mess that we are only surviving because of the Federal goverment bail-outs, absurdly low interest rates from the Federal Reserve along with the Federal Reserve buying tens of  billions of dollars of financial assets every month to support the financial markets.

The Republican refusal to consider raising taxes is stupidity at this point in time.  Nobody likes taxes, but with a huge and growing federal deficit - largely spawned by the Republican administrations fiscal and policy irresponsibility in the last 30 years - handing out tax cuts like candy while increasing spending - we are in a situation where trying to climb way out of this economic mess with cuts in spending is like the discredited old medical practice of treating sick people by cutting a vein and draining out their blood.

Republican's need a reality check to make them face up the the fact that many of their economic theories are self indulgent fantasy.  The only way I think that will happen is when enough other voters figure this out to toss out the House Republican majority in the next election, and maybe not vote Republican for a couple election cycles.  A few years in the wilderness might bring some sanity and reality to Republican economic theorists.

Unfortunately, absent some kind of wake up call to pull the Republican's off their no taxes position, I think we as a country will continue with a crippled economy for a number of years.  At least that is what I am assuming for business and investment planning purposes.  Like to be able to believe something different, but reality is reality.