BY: Russell Richey
Recently there has been a huge uproar in the
American Economy around the issue of decreasing federal spending. It was intended to serve as incentive for the Joint Select
Committee on Deficit Reduction (aka the “Supercommittee”) to come to a deal to
cut $1.5 trillion over 10 years. If the committee had done so, and Congress had
passed it by Dec. 23, 2011, then the sequester would have been averted. However
both the Democratic and Republican Parties have shown that they are on
different agendas. Republicans have sentiment towards Defense spending and
Democrats want to protect domestic spending.
In total the Sequester has
accounted to cut more than 8% of the nation’s total defense spending. Most of
the programs being cut are in the area of future weapons systems. Weapons used
to finance the United States most recent military operations have not seen much
shrinking. However, some of the military’s top secret programs have been put on
hold due to the issues in Washington DC.
As illustrated in the picture
below, many programs are losing money to enhance current conditions of military
equipment. Some of the videos will help you understand how the cuts will affect
the economy. One should consider how the overall economy will be affected and
what kinds of stocks will outperform or underperform due to this action taking
place on Capitol Hill.
This video will help you better understand
the bigger picture of what is going on behind the cuts.
interesting post. i never really understood everything relating to defense spending and how it could help or hinder the nation. I would think that defense spending would not be an issue because of all the recent advancements with technology.. making it cheaper and faster to produce weapons.
ReplyDeleteThis is a great post Russell. As you mentioned, it is essential for us to take into consideration the overall economic effects on the decision to cut back on any government sector. The first thing that comes to my mind is a decrease in the number of jobs. By cutting spending, the government is also reducing the number of jobs that its citizens have available to them. This will increase the unemployment rate and may create more of a personal strain on the individuals within the American working class.
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