Five days in, and the sequester is feeling more like a siesta.
But don’t worry — things’ll get more exciting before long.
Let me boil this whole budget battle down for you into five simple words: the American economy is broken.
The economy isn’t growing very quickly, if at all. But that’s not the real problem. Nor is the problem that there are too few jobs being created even as too many people are trying to enter the work force for the first time, or re-enter it.
Those are part of the problem, but not the key thing.
And the problem isn’t just that the US is spending trillions of dollars too much year after year trying to get out of the recession.
The problem isn’t even that the Federal Reserve has felt it necessary to keep interest rates near zero percent for an unprecedented length of time, thus robbing savers of interest income and rewarding those — at least for now — who are willing to gamble in the stock market, commodities, real estate, art or anything that might generate some reasonable amount of wealth.
Nope, those aren’t the things you should be most concerned about.
You should be worried that the solutions to all the above problems aren’t working. And they haven’t been working for the last five years. In fact, the solutions — the old standbys of low interest rates and deficit spending — are now creating more problems than they could ever solve.
Sequester, in case you went into a trance this past week, is the name for $85 billion in arbitrary, automatic federal cuts that started going into effect last Friday.
Americans like fireworks. But the sequester didn’t provide any, unless you count the explosive language coming out of the mouths of White House officials.
President Obama promised — and that’s really the right word — a catastrophe if the automatic cuts were allowed to kick in.
He gets the dunce cap for that.
In fact, his sky-is-falling rhetoric will cause the president some problems in the months ahead. If the sky — and the economy — didn’t collapse during the sequester, some people are going to think that even more budget cuts are called for.
In short, the president’s credibility has been badly dented.
That’s why things are likely to get more exciting in the months ahead when the Republicans and Democrats start dueling over raising the federal debt limit and the continued funding of the government.
Oh, and of course there is still the sequester.
The sequester came in this week with a yawn but that doesn’t mean it won’t have any impact. In fact, the $85 billion in cuts will have a big effect since the US economy is barely expanding, if it is expanding at all.
Who’s right in all this? Is it the Republicans, who want the government to stop spending so much? Or the Democrats, who want taxes raised?
Well, both of them are right. Taxes need to be raised because social programs in particular have to be protected in a bad economy, and spending needs to be cut, especially since we can’t continue to absorb annual deficits of more than $1 trillion.
But both of the parties are also wrong. Spending cuts and higher taxes will weaken the economy, which in turn will lead to lower tax revenues and higher deficits. That will begin a vicious cycle of spending cuts and tax hikes.
I’ve already explained my idea.
Change the rules on personal retirement accounts so that people can use trillions in these accounts to stimulate the economy in this time of need.
I won’t go into it here, but it is explained fully in my Feb. 19 and Feb. 21 columns. Look them up if you are interested.
I’m still waiting for Washington to come up with something better.
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This would be a great time for the Steinbrenner family to sell the Yankees, don’t you think?
Now that George is gone, his family doesn’t seem that interested in the team. And the Yankees seem to be having problems selling tickets.
Plus, the payroll will be down substantially this year and next, especially if team can dump A-Rod on a technicality.
So the team will have profits that would be more attractive to investors who — you never know — might care about baseball.
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You probably didn’t realize that Feb. 28 was National Tooth Fairy Day. And if you did know, you probably didn’t care.
Well, the credit-card company Visa did care. So it surveyed people to find out how much the Tooth Fairy is leaving their kids when they leave teeth (hopefully their own) under the pillow.
The answer: an average of $3 a tooth last year, which is a 15 percent increase over the $2.60 in 2011.
But let’s floss on this a minute and figure out if the offspring of hedge-fund wizards might be throwing off the data. The biggest increase is among kids who receive more than $5 a tooth. They got a 5 percent boost in 2011 and an 8 percent jump last year.
Sure, there it is again: The prosperous 1 percent is doing much better than everyone else.
Visa, by the way, has an app that’ll let parents know the going rate for teeth. But you’ll have to find it yourself because I’m fairy sure you’re already tired of this item.