Sequester: In search of leadership
It’s beginning to look like the sequester set forth after the collapse of the “Supercommittee” may actually become law on March 1, and quite a few people are upset about that eventuality—not the least of which being the nation’s commander-in-chief. On Wednesday, President Barack Obama gave a series of interviews to various small town news outlets decrying the impact that the sequester would have on their communities while imploring Congress to find tax “loopholes” or other spending cuts to postpone or eliminate the reductions in defense spending that will total $47 billion this year, along with an identically-sized reduction in spending in Medicaid.
The president was, naturally, quite judicious in his choice of markets: Every media outlet he talked to happened to be located in a community heavy dependent on the defense industry, with citizens who are (naturally) quite concerned about the impact a sharp, severe cut of the defense budget will have on their towns.
While I assume the president sees this media strategy as being good politics, it makes for lousy economics—and it coarsens the discussion going forward.
Everyone understands that having an unemployment rate of nearly 8% causes untold damage — economic and otherwise — to our country. Millions of families struggle to get by, older workers take retirement earlier than they’d like at a lower benefit, and our government spends tens of billions of dollars more on food stamps, Social Security, and unemployment insurance benefits. Various state, county, and local governments have been especially hard hit by the Great Recession and the concomitant unemployment, and they find themselves struggling to provide basic services to residents.
However, the president’s crass calculus in his media blitz obscures the more central issue at stake, which is how big should the government be and what should it be spending its money on?
Congressmen are terrible about this. Most of them campaign (and are elected) on what they promise to do for their district, not their country, so they put their district first. This is especially evident on the House and Senate Armed Services committees, which are peopled by members with a significant military presence of some sort in their districts. They typically see their duty, first and foremost, to protect whatever is in their district from defense cuts. Partially as a result of this, our military buys a variety of weapons systems, ships, various and sundry hardware it doesn’t want or need because of the exercise of power by the committees of jurisdiction.
No one is immune from this: Sen. John Thune, R-S.D., widely considered one of the leading small government advocates in the U.S Senate, stakes as his proudest claim his maneuvering to save the Ellsworth Air Force Base in his state.
The president, however, does not have a single constituency: he is tasked with looking out for the well-being of all 50 states. For the president to stoop to the level of a congressman and agitate that we stop scheduled military cuts, not for any reasons pertinent to national defense, but because the government workers in southeast Virginia are going to be furloughed one day a week and that could wreak havoc with the local economy is an abdication of his responsibilities.
Every president invariably touts some government spending program or another as creating “jobs,” so President Obama is not unique in his perspective. What is unique is simply the degree to which he currently chooses to exploit it.
In the long run, government spending does not “create” jobs; in fact, in the long run, government spending that’s ineffective at improving the productivity of the economy tends to cost us jobs. We can (and should) countenance that when that spending provides our society something we collectively value, such as defense, but we should always recognize that there is an opportunity cost to that spending, so we make sensible decisions when deciding how much to spend on defense and how to spend that money.
It’s too much to ask for congressmen to set aside the short-term exigencies of their district when making such decisions. Unfortunately, it’s apparently now too much to ask of our commander-in-chief, as well.
