Pentagon Budget Sequestration Will Not Devastate The U.S. Economy

The Pentagon will only feel the pinch in peripheral areas of spending, like maintenance; big projects will be unaffected. Photograph: Rick Wilking/Reuters

Pentagon Budget Cuts Will Not Make The US Economy Bomb -- Michael Cohen, The Guardian

Belt-tightening at the Defense Department won't cause recession but scare tactics camouflage where real spending casualties are.

Since the devastating across-the-board spending cuts – including the billions in reductions to the Pentagon budget – known as sequestration became the law of the land, the US military has deployed a host of arguments for why this an enormous threat to US national security – which, as I wrote a few weeks ago, it really isn't.

In Monday's Washington Post, Zachary Goldfarb takes up the cause by identifying a new reason to be concerned about the implications of military sequestration: the economic impact. According to Goldfarb, it is the left that is really feeling the bite:

"Liberals are increasingly facing a conundrum as the Pentagon experiences the deepest cuts in a generation. The significant reductions in military spending that they have long sought are also taking a huge bite out of economic growth."

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My Comment: Sequestration does not entail massive budget cuts .... what it entails are cuts in the rate of defense spending growth. In short .... the U.S. defense budget will still be bigger than last years .... the only difference is that it will not be as big as originally planned. So will these cuts impact the economy? From my vantage point .... no.