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this this this. I have no sympathy after seeing so many good people in my field lose their jobs while the government got fatter and lazier.
Nothing personal, bro, but I had two employee of the year awards and ten other merit cash awards for my old company over twelve years but that didn't stop them from "suggesting" that I take an acquisition-related severance when management nuked a ridiculously hard working, effective, but wildly understaffed IT department. That is now almost four times as big in personnel as we were in 2008 yet far less effective because of all the unethical lying idiots that replaced us. And resulted in three of the five upper management folks getting fired in 2009 - the real cancer of the department is still employed there...
When I lost my job, my eldest was about two weeks away from starting college out of state; no question it's scary. I do feel for you and hope you make it through ok.
I left my management consulting gig about 7 months ago to take a job with the Feds. There is definitely plenty of fat in the government and despite being a federal employee I really hope there are some significant cuts (i'm definitely in the minority opinion amongst co-workers). Unfortunately, I doubt they just remove the dead weight like they would in the private sector. The country needs to wake up and realize we are at the tipping point. We are much better off taking some pain now. 5-10% cuts now are much easier than being in a situation like Greece where 50% cuts are needed. Unfortunately congress has been kicking the pain down to future generations for years now. I've worked the past 10+ years of my life in and around the government accross more than 15 agencies. There is definitely plenty of waste in all of them but I'd have to say my DoD clients are by far the worst offenders. I had a client spend a billion dollars on a program to develop a piece of technology commonly available at best buy. (it was a great idea 20 years ago). If sequestration hits my current agency, the director of my agency told me we are looking at 20-25% furloughs. On the bright side my golf game should improve. To be honest, I thought Romney would be great at over seeing a program where lots of fat was cut out of the government. I hope the president puts together a commision made up of some of the brightest third party consultants to help figure out where to best make cuts. Leaving the decision of where to make the cuts to career government employees will just lead to more of the same. Most career govt employees will choose either furloughs or cutting the new peeps instead of making the tough decisions like cutting their friend Bob, the IT manager, who doesn't know how to email an attachment.
Growth, growth, growth. Sequestration does nothing to the overall economic picture if we keep stumbling along under 2%. I work with feds a lot and know first hand how it cries out for actual management and cuts related to that, but that's not how it works in real life. Every dep't will pick max pain cuts to make the public/congress squeal and reinstate it, so let's just save us the drama.
Boehner offered the Romney plan. Cut the rates and max out deductions at some level or other. That concept has rattled around in an O plan or two as well. It's sound. Make it score as revenue neutral (or even plus revenue), but watch growth tick up and do more for deficit reduction than any sequestration can do.
Sequestration only makes cuts to the scheduled rate of increase of spending, not actual cuts to current spending, correct? And it's over a ten year period, with the smallest amounts occurring in 2013?
Just a taste...again, we're headed for sequestration unless there is something to replace it, which would be painful in different ways. I'm willing to hear any alternatives, but unless there are any, we're stuck with things like this:
Boeing announced a major restructuring of its defense division on Wednesday that will cut 30 percent of management jobs from 2010 levels, close facilities in California and consolidate several business units to cut costs.
Austerity is working great in Europe. We should totally try it here.
Austerity is necessary in Europe, which is why they're doing it. The pains from having to shrink the social welfare state are always going to be there, and maybe we can learn from what they're going through...because it's becoming increasingly necessary for us, too.
This is spot on. Unfortunately, politicians never want short term pain because it means they dont get re-elected. But if you do nothing and wait too long you become Argentina.
This is pretty much what I said on the first page. Better to go through a little pain now, than a total debacle in a few years.
It's not going to be popular, but it needs to be done. And that's exactly why it won't be done.
Go away, KA!
Nonsense. Our borrowing costs are lower than they have been in years. The only "necessity" here is one that you are trying to self-impose. Is there a long-term debt problem? Maybe. But cuts now will just make those worse. Putting people out of work means less growth, which means less tax receipts, which means more cuts, etc. Austerity is a horrible idea, and the results in Europe prove it.
Anyway, its not worth debating. Most folks like you just have a philosophical objection to government spending that has nothing to do with the economy, the size of the debt, or anything else. I would suggest that maybe cutting spending in the midst of a recession is not the best idea, but that would fall on deaf ears.
Our borrowing costs may be low, but what happens when our lending pool dries up?
Yeah we were told that 2% growth is amazing and proof of a robust recovery
That's not what I recall. Anyway, if you want to argue the economy is great, go ahead.
borrowing costs being low are part of the problem which has created the large debt bubble. Look what happened to the housing market. Low interest loans lured people in to borrow more than they could afford. Even at low interest rates the interest we pay on the debt is soon going to pass the DoD as the largest line item. And what happens when inflation hits? What happens when countries realize our credit doesn't justify low interest bonds? We'll have to pay a ton more in interest and as that happens our credit will only get downgraded again. Its a downward spiral that can't be stopped. If you don't think we have a long term debt problem you've obviously been drinking the Kool Aid.
No one ever wants to cut spending because it will limit short term growth. Its easy to point to history and show that stimulus spurs the econonmy. however, what those graphs don't show is what happens in the future when a country has borrowed more than it can afford. I grow tired of morons on the news who dont know jack shit about how markets work screaming for more stimulus spending. They remind me of drug addicts who thing more drugs is the answer to their recovery.
Its long past time that our government starts to tackle spending and the entitlement programs. I'd love to see a balance budget amendment used a bargaining chip.
Throwing more spending and debt at debt is working out great in Spain & Greece.
Economies don't expand in perpetuity. Contraction is a natural economic cycle. Unfortunately we spent a lot more on the credit card than we were earning to live the high life for a good decade or so. Gotta pay the piper at some point.
This whole idea about austerity being so bad seems so ridiculous to me. Its like the stock market falls a couple hundred points and everyone goes crying for more QE. OH NOES, we can't let the market fall!!
Wake up people. Growth cycles don't go for ever. That is why they are called economic cycles. WE had some big boom years that we goosed by excessive credit creation. Now that excess has to be de-levered.
We can either get out in front of it and take responsibility, or put our heads in the sand and wait until the crisis hits...which it inevitably will. Everything has a price. Nothing is for free.
no increases in tax rates for anyone. thats the battle line. boehner, cantor & co need to stand their ground and hold the gop together on this. punishing people for having succeeded in life is patently unamerican. we do not have a revenue problem!
if we go over the cliff so be it. this country is a like an alcoholic, drunk on spending. we may need to hit rock bottom before we can recover.
NYCTerp is now OCTerp
LOL all this "our borrowing costs are low" crap. They are low until they aren't. What happens when the bond market calls the bluff? They are low until they rocket overnight and you have a crisis within a week. Have you not watched Europe (Greece & Spain charts below for example)? Their debts were fine because of stable rates, until they were not.
When it happens, you don't have time to plan. Look at Japan. When the endgame comes, it will only take a 200 basis point move to blow them up. Thinking that it will never come is just putting your head in the sand.
I suggest you read this book:
Unfortunately sequestration wouldn't just affect those fat, bloated government workers. It would probably kill the US economy for the near term and would definitely cause Europe to go into deep recession. We all know what's happened with the PIIGS, but even Germany and France are starting to show cracks and are in precarious positions. If the US all of a sudden cuts spending drastically, that would affect a ton of German companies and probably sink their economic Bismarck.
Obviously not saying that we can go on with the status quo, but there is always a better solution than just cutting across the board. Entitlements need to be addressed, but for me, one of the areas that needs to be addressed is federal government rules and regulations. The bureacratic nature of these entities is insane and adds layers of costs and delays onto projects and just running the organization.
Among those areas that need to be addressed most significantly is personnel. I spoke with the head of OPM this time last year and, while he didn't come out and say this, you could tell that he was completely disheartened by how hard it was to get anything done at all. Just discussing the personnel practices with friends of mine, it's completely asinine how much work it wakes to hire someone and obviously lol at trying to fire someone. I know gment workers get a bad rap overall and it isn't deserved in some cases, but it is certainly deserved in a large number of them. We're not going to fix anything in government until we fix the entitlement culture of both the citizens and the employees.
borrowing costs are low, so I'm going to run up $80K on a 2% interest credit card. the interest is turned over every 2-3 years to the then prevailing rate. good plan right?
If possible, I'd like to have sex with Carmen Reinhart's brain.
Again, maybe I am not understanding something, but this is supposed to be a cut to the scheduled increase in spending. I think it is $86 billion for 2013. So hypothetically, if total spending was supposed to increase $100 billion as-is from $4.0 trillion to $4.1 trillion, it will now just increase from $4.0 trillion to $4.014 trillion. That is still an increase.
Cuts should be indiscriminate across all departments. That way, nobody can lobby to avoid any cuts at all. Otherwise it is just the standard favoring of the most politically connected.
John Berry is a good guy in a bad position.
There is nothing low about our borrowing costs which are projected to be around $250 billion in 2013.
Its not an 8% cut in growth its an 8% cut in spending of non entitlement programs. And because they won't be effective until 3 months in its really a 12% cut as compared to prior year spending. Digging deeper, there are many fixed price contracts which the govt is already obligated. For example, at my agency half the agency costs are our property leases which are paid to GSA. Nearly half our budget can't be changed (as this spending is required by congress). So now we have to squeeze 12 % across half our spend which is why furloughs of 25% are expected. This is definitely going to have a big impact on the economy and especially the DC area. If you are currently looking to buy a new home in DC i'd hold off a bit if I was you. I'd expect to see the housing market in this area to dip back down as unemployment picks up. Like I said I agree cuts need to be made but I'd like to see them made a bit more gradual and ideally it would be nice to allow the agencies time to know in advance how to best make their cuts.
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