Matt Yglesias thinks you shouldn't fret about the effect of sequestration on the peasants.
He makes a valid point about the bloatedness of a the defense budget -- yes, he's right that it could bear some cuts. But beyond that:
... So then you look at the domestic side. Your basic transfer payments to poor people are spared, your transfer payments to the elderly are basically spared, and then everything else gets cut willy-nilly. That leads to some real policy harms. Valuable research grants are going to not happen. We'll see some real bottlenecks at regulatory agencies. But obviously there's some waste and fat in this domestic discretionary spending.That's what brings me up short -- not the wonktastic reference to the "Evans Rule" (go here for an explanation), but the elitist arrogance of those last few words: there's more to life than timing.
Long story short, if you're a defense dove like me and have a nonutopian view of the domestic discretionary budget, then this looks like we're mostly talking about harmless spending cuts. It is very true that the current moment is not an optimal time to cut wasteful government spending. Given the high unemployment rate, the low and stable inflation rate, the low cost of federal borrowing, and the weird dynamics of "Evans Rule" monetary policy, I would say that 2013 is an excellent time for the federal government to waste some money on make-work military contracting gigs. But in the grand scheme of things, wasting resources on low-value programs is not a great idea, and there's more to life than timing.
Maybe there's more to life than timing for you, Matt, a fast-track journalist who's skipped effortlessly from excellent career-building job to excellent career-building job in the past decade, but for the ordinary schmucks who've waited years for a genuine ray of hope in their economy, the one that seems to have permanently high rates of unemployment, timing is everything -- as in, these people need a break now.
What Yglesias says in the lead-up to that statement is absolutely correct: we should be doing far more to put money in ordinary people's pockets. I don't care what it is: I'd take "make-work military contracting gigs" or a huge infrastructure repair program or any other way you could make it happen. Whatever will inspire people go to the mall next weekend. Whatever will flow money through the rest of the economy.
If military contractors are laying people off, retailers in regions where military items are made will suffer. If federal workers are experiencing one-day-a-week furloughs, their ability to spend drops 20%. And on and on. And, of course, this happens in an economy where most people barely have an economic cushion -- I bet Yglesias has one -- so how far will some of these people sink, even if the cuts are temporary?
This seems like a not-horrible idea if you're in an ivory tower miles above the earth where most people live. Unfortunately, Matt, most people don't get to watch from there.