Fascinating rant from Jon Talton:

“Let the sequester happen and keep it going. Ever since Ronald Reagan ran for the presidency, politicians have gotten ahead by claiming “government is the problem.” And voters accept this as they accept their Social Security checks, Medicare benefits, safe food and drugs, freeways and roads to drive on, in vehicles powered by gasoline kept artificially cheap by federal subsidies, armies and fleets, live in a Sun Belt made habitable by federal initiatives from the TVA to the SRP, survive airplane flights thanks to government air traffic control…and they think government is the problem. A people this stupid and corrupt deserves the real-life experiment of seeing whether they really are rugged individualists who don’t need no gub’ment. Bring it on.”

- Jon Talton, on the current U.S. budget crisis.

Discuss . . .

Category: Politics, Really, really bad calls, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

39 Responses to “QOTD: “Let the sequester happen””

  1. Lee Adler says:

    I agree with the sentiment, but as Yogi said, “In theory, there’s no difference between theory and practice, but in practice there is.”

    The widely accepted theory was that the sequester would be terrible for the economy and for the American people. I agree with those few who have held that the theoretical economic impact has been way overstated, but more importantly I have held all along that the sequester is actually bullish, for the very simple fact that increased taxes coupled with reduced spending reduces Treasury supply. Anything that even modestly reduces Treasury supply frees up more Benny bucks for stocks.

    Like it or not, even if only a tiny percentage of QE seeps from the stock market rally into economic activity, the sequester, by reducing competing supply, could add to the stock market rally, and that could result in just enough of a signal to businesses to offset the tiny impact of the reduction in spending from the sequester.

    There are also other things going on in the rest of the world, particularly the return of European fears after a few months of complacency, which will send capital cascading into the US system once again. The effects of this and the second order economic effects of Fed’s massive money printing should far outweigh the negative effects of the spending cuts. It’s not that they won’t be there, it’s just that, for practical purposes they won’t be measurable given the immense power of countervailing forces.

    I suspect that those shaking their fists in rage about the sequester will be hugely disappointed that there won’t be any measurable impact, and that the market will probably continue to rally. This is the fairy tale world of money printing. It’s an illusion, but it will last until something forces the Fed to stop, and the curtain is pulled back.

  2. RW says:

    In the abstract I completely agree …except those least responsible tend to be the ones hurt the most so I can’t …however

    if the sequester were exclusively targeted at welfare for large corporations and the top 1% that would be a different story: They benefit the most from government largess and are the most responsible for the rules that govern the (re)distribution of that largess so …

  3. Singmaster says:

    The problem is that Medicare, Medicaid, Social Security and Congress’ salaries are untouched.
    Cognitive dissonance abounds.
    From:
    http://www.theatlantic.com/magazine/archive/2013/03/the-hanging/309210/

    Clay is perennially one of the poorest counties in Kentucky. The area’s biggest employers are the school system, the city hospital, and a nearby federal prison. There are no large factories, only a Walmart. Per capita income is $12,500, and 45 percent of the county’s residents receive Medicaid.
    The 21,730 people living in Clay County are predominantly white (94 percent) and predominantly Republican (84 percent), but you don’t find much passion for politics.

    This sequester won’t change anything. These people apparently do not understand that they are sucking from the government bottle and they are still Republican.

  4. CSF says:

    The other party also says “let it happen,” for different reasons. Both sides are equally ideological and stubborn, and that’s why we have sequestration.

    As an investor, I keep reminding myself that it’s .55% of GDP. It’s not bullish, but it’s a smaller impact than the payroll tax increase.

  5. gordo365 says:

    Guys – do you need a refresher course? Cuts are going to goose the economy. Just ask Michael Boskin http://www.hoover.org/news/daily-report/141766

  6. dvdpenn says:

    Back during my days as a Red, we used to mock the Revolutionary Socialists who claimed that what we really needed was for economic and social conditions to get much worse so that the working class would be more enthusiastic about overthrowing capitalism. Good times.

  7. RW says:

    “…the rhetoric of the sequester is making everybody look in exactly the wrong place for solutions to America’s long-term fiscal problems. The amount that the government spends on national parks, or on FBI salaries, or even on mine-resistant, ambush-protected Army vehicles, is of course irrelevant to the question of how to create an economy which can afford medical care for all over the long term. But it also creates a framing problem — making it seem as though government expenditures are the nail, and that therefore budget cuts are the necessary hammer. Even as, all the while, the deep and real problems become that much more structural, embedded, and intractable.” - Felix Salmon

  8. barbacoa666 says:

    I’ve had the same opinion as Mr. Talton for a while. But I’m not sure that society is rational enough too make the connection between the cuts and the negative results.

  9. Warren Hinckle, writing in the infamous Bay Area radical publication Ramparts in 1972, said something quite similar: vote for Nixon, and bring on the revolution.

    It’s a seductive pitch, but one that ignores or glosses over the real hardship that will come from it. It’s the rhetorical equivalent of throwing up one’s hands and saying “screw it.” Tempting, but usually not all that well-considered.

  10. rd says:

    I have observed two fundamental issues in the US about government spending over the years:

    1. The US doesn’t have a social contract between the government and population about what government is supposed to do and how well it is supposed to function. There is an expectation from a high percentage of the population that govenrment is, by its very nature, incompetent and therefore having good management is not possible. If you elect a lot of politicians who are determined to prove that government cannot function well, guess what the result is? Many “socialist” countries have high tax rates but expect to have high quality services in return and so their economies don’t collapse.

    2. Government spending is often disconnected by taxation due to transfer payments and mandates which disrupts the ability to form a social contract on spending and taxation. The Federal government will send transfer payments from its taxes down to states and municipalities. It may also pass mandates down as well without funding to carry them out, so when a local tax is increased it is often because of some mandate that is completely out of the control of the local government which means that nobody is accountable now. This also occurs at the state level. For example, in NYS county governments are responsible for much of the spending on Medicare with mandated requirements from the federal and state governments but only partial funding. So local proprty taxes pay for some of the mandated spending on what is essentially a federal and state program. There would probably be a much better social contract if the spending occurred at the same level as the taxes. In Canada, provincial taxes are about the same as federal taxes, so the province taxes for universal healthcare but is also responsible for delivering it. There is no ambiguity about where the decisions to tax and spend on healthcare come from.

  11. bonalibro says:

    The best way to have a sequester is to pull all federal spending from states whose representatives are most in favor of tax and spending cuts. They are usually the very states who are most in need of federal dollars. We’ll see if they don’t start to cry a very different river.

  12. Nogodsnomasters says:

    Love the Yogi quote. The sentiment of Mr. Talton’s rant is seductive, but it takes more than stupidity or pigheadedness to explain the behavior of the segment of the population he targets. Anyone for an explanation adding in a little racism?

  13. nofoulsontheplayground says:

    The management of government is the problem.

  14. GeriArctic says:

    To that particular group, the “government is the problem” is little more than an article of faith (the unshakeable belief in the unprovable).

    Even the problems which would come about from a major reduction in government would just be blamed on the government.

    Better just to ignore.

  15. GeorgeBurnsWasRight says:

    No fouls-

    And the politicians who manage the government were hired (elected) by the voters.

    Pogo was right, too.

  16. Joe Friday says:

    Talton may well be correct.

    I remember during the campaign somebody showed a focus-group comprised of Republicans, Independents, and Democrats what the implementation of the Ryan budget would entail and the devastating results.

    The Independents and Republicans simply refused to believe that anyone would enact such a budget. The Dems, of course, are already aware that the American RightWing is batshit crazy.

    Perhaps the bitch-slap of reality is what it will take for Independents and rank-and-file Republicans to wake the hell up.

  17. river says:

    I like that idea, but I like that idea better for a particular state or two (Texas or how about Louisiana). I wonder how much they will holler once their military bases get shut down and whole towns get economically ruined.

  18. znmeb says:

    I don’t know about you but I am totally sick of the rhetoric, the lies, the half-truths, the appeals to our emotions and the rantings and ravings of our elected officials and the “press” that covers them. We have a strong tradition of management science in this country. starting from operations research in World War II. We have modern portfolio theory, we have Black-Scholes, we have market microstructure, we have econometrics and actuarial science.

    *And*, we have computers to turn all these masses of numbers into *predictable* policy decisions. I’m sick of the bullshit. These are *solvable* problems.

  19. 873450 says:

    “Reagan proved that deficits don’t matter. We won the mid-term elections, this [2nd tax cut overwhelmingly benefiting 1%] is our due.”
    Dick Cheney

    In other words, deficits matter only when democrats occupy the White House and win elections.

  20. jhawkins90 says:

    We can’t cut one or two percent of government expenditures without screams of returns to rugged, unfettered, chaotic (insert whichever adjective you find most appalling) individualism?

    Government spending will still be higher than it did last year…

    Isn’t this whole debate absurd?

    Like John Talton, I feel very urged to use expletives, but I’ll merely say let it happen, because it won’t matter.

  21. MayorQuimby says:

    My mother is perfect example – receives Social Security and complains about gvmt (she is a Republican). She never saved a dollar.

    All humans want to take more out of any system than they put in. Look at bond yields! Look at the SPX yield!

    It *will* end in tears eventually.

  22. MikeNY says:

    I agree that everybody wants *theirs*, wants a free lunch … and that can’t go on forever.

    The bigger issue IMO is the venality of our political system, and the corporatocracy: the impossibility of materially reducing our obese military- and healthcare-industrial complexes.

    We only make substantive budgetary changes in this country when there’s a real crisis — and I expect it will be no different this time. Of course, that could still be years away.

    The sequester is small potatoes. But at least half of it aims at the DoD.

  23. Global Eyes says:

    It started as an economic problem but now it’s a political problem, too.

  24. Jim67545 says:

    In the words of Larry: I may be dumb but I’m not stupid!
    In a country where even high school graduates are illiterate, where a high percentage never read anything, where sports and circuses is what passes for news, why do we wonder?
    I wonder whenever I see that a large corporation is laying off 15,000. How did they let things get so out of control? Why did they pile up headcount in a business line that was failing?
    At least corporations undertake periodic catharsis (or BK makes them) and “right-sizes” their workforce. Government seems unable to do such a thing aside from hiring freezes.
    In my view it is the inability of the elected governing board (Congress, State Legislatures, etc.) to actually oversee that is the core of the problem. I know.. DUH! In this I find rd’s comments insightful.
    I also question the states’ rights concept. Yes, it permits customization, local control and experimentation. Yet it creates 53+ (Guam, PR, VIs, Indian nations) sets of administration staffed not with the best and brightest, highly duplicative, underfunded usually (as the federal government pushes mandates downstream), with a therefore needlessly complex federal oversight function.

  25. Low Budget Dave says:

    It is my impression that certain people would cheerfully burn down the entire country as long as there was a 51% chance of blaming it on Obama.

  26. AHodge says:

    its true everybody rants cut govt,
    but not my stuff
    but is sequester the show you lesson?
    he seems to have missed there are zero “entitlement” cuts in the sequest
    like the social security and medicare he cites
    or to be precise only tiny admin or reimbursement related stuff

  27. CharlesII says:

    Znmeb says, “*And*, we have computers to turn all these masses of numbers into *predictable* policy decisions. I’m sick of the bullshit. These are *solvable* problems.”

    Perhaps you’ve heard of the Congressional Budget Office? They specialize in turning masses of numbers into predictable policy outcomes. While they have sometimes (ca. 1995) been politicized, they have a generally good track record.

    So ask yourself: What is the difference between a predictable policy outcome and a predictable policy decision? If the image of your congressman flickers on in your imagination, you will have learned wisdom, grasshopper.

  28. jjsocrates says:

    This says it ALL: “Ever since Ronald Reagan ran for the presidency, politicians have gotten ahead by claiming “government is the problem.” And voters accept this as they accept their Social Security checks, Medicare benefits, safe food and drugs, freeways and roads to drive on, in vehicles powered by gasoline kept artificially cheap by federal subsidies, armies and fleets, live in a Sun Belt made habitable by federal initiatives from the TVA to the SRP, survive airplane flights thanks to government air traffic control…and they think government is the problem. ”

    But the Simpsons said it much more succinctly and effectively: “The people like the Bear Patrol, but don’t want to pay the Bear Patrol tax.”

    Actually, some rube said it best 3 years or so ago: “Keep your goddamn government hands off my Medicare!”

  29. Joe Friday says:

    jhawkins90,

    We can’t cut one or two percent of government expenditures without screams of returns to rugged, unfettered, chaotic (insert whichever adjective you find most appalling) individualism?

    Except it’s not “one or two percent of government expenditures” that is being cut. Parts of the discretionary side are far higher, from a level that was already the lowest since Eisenhower was in office. Do you really believe we can operate a 21st Century government on 1950s revenues ?

    Spending is not the problem. Lack of revenue as a result of tax cuts in the problem.

    Government spending will still be higher than it did last year…

    But on what ?

  30. eliz says:

    Until people understand there is a middle ground — that government is necessary and can be good, along with fiscal restraint, the loudest voices will be two extremes: 1. Government is bad. 2. We can’t tighten the government’s belt as bad things will befall the people.

    There is absolutely room for our current government to become more efficient and effective. Given the polarized views on the hill, I don’t count on that happening, sequester or not.

  31. dwkunkel says:

    The problem isn’t really government, it’s a large organization issue. Any large company that’s been around awhile while exhibit many of the same characteristics that government detractors constantly complain about. I’ve dealt with this most of my life and concluded that It’s a quirk of human nature and not likely to get fixed.

  32. beaufou says:

    Interesting that those who wish to drown the government in a bath tub, and eliminate the debt, are also the ones who want to keep taxes to an all time low.
    Debt is the instrument by which citizens take control of the State, it is also a means of survival during conflicts.
    The fact that the government wants to borrow from citizens must, in order to benefit from accessible credit, appear as a legitimate democracy, ensuring the identity between the government and the population of potential lenders ensures that identity and then allows the government to access more resources.
    Montesquieu touched on this subject a long time ago, arguing that a true democracy would have to tax well while spending well for its citizens to enjoy more liberties.
    What we are experiencing now is closer to Napoleon’s empirical view that the Nation is its army. Although he didn’t have much of a choice.

  33. E says:

    I’m allergic to partisans. I wonder how many of them read the link that Talton provided about how the Obama administration has pushed for this level of cuts from day one? That should explode heads on both sides of the aisle.

    http://www.ft.com/intl/cms/s/0/0ed2ad18-80f4-11e2-9fae-00144feabdc0.html#axzz2MAzKFsXc

  34. flakester says:

    Leveraged long the S&P, Benny and Foggy Bottom have my back.

  35. Robert M says:

    One, I hope everyone read the whole thing. I was happy to see he took both parties to task.
    Two, I am of the opinion the American populace is to lazy to examine the facts so nothing will happen.
    I just try to act like Ace at the end of Casino and remember everybody needs someone who can make book. Mine is in stocks.

  36. Peter Pan says:

    I think this excerpt is very slightly misleading. I highly recommend reading the entire piece. Talton bashes both Republicans and Obamacrats quite well.

  37. Joe Friday says:

    Folks don’t seem to be grasping reality.

    There are 20 industrialized nations on the planet, and we have the smallest federal government of the 20 (as a percentage of the population, of course). This does NOT include the gargantuan Military Industrial Complex, but merely the governing part of the government.

  38. rd says:

    BTW – just flew out of a major airport today. The line they were closing so that those TSA workers could go on coffee break was flying because they only used the old metal detectors. The other lines were grinding at a third of the rate because everybodywent through a full-body scanner. It will be very easy for TSA workers to demonstrate that the sequester will impact traveller security waits.

  39. 873450 says:

    Sequester will make air travel cheaper and safer.

    As a libertarian, I can live with not surviving airplane flights if sequester forces the FAA to get rid of the overpaid air traffic controllers causing airport delays and cluttering travel routes. Instead of firing and replacing them, Reagan should have eliminated their jobs entirely. Our founding fathers intended the sky to be free for all God’s creatures. In its natural, unfettered state, flight operates in an inherently self-preserving, self-regulating balance of law and order. When was the last time anyone saw birds crashing into each other? Pilots should be free to take off, fly and land whenever and wherever they choose. Smaller, older, weaker aircraft will adapt, get out of the way and survive, or disappear.

    The sequester will save more money by forcing DHS to cut back illegal, intrusive airport security searches. Now we can carry knives aboard planes to kill terrorists and stand ground fighting abusive drunks who can’t handle liquor and don’t know how to behave. Armed passengers dispense with the need for wasteful federal sky marshals. We can stop subsidizing an army of double-dipping retired cops sleeping and eating for free in business class, doing nothing, waiting for nothing to happen, serving no useful function. Now the airlines can sell the unpaid for seats occupied by profit robbing marshals to paying customers armed and free to protect themselves without an expensive nanny.