Happy Valentine's Day! What better way to celebrate the day of love by writing about the end of the global economy as we know it?
So, as we know, at the start of March the latest deal to not make a deal about taxes and spending cuts expires. Unless there is an agreement (even another temporary one to kick the can down the road, a process no one seems to like but everyone seems to want to do) then draconian Federal spending cuts kick in, which is a process known as "sequestration".
And if there is sequestration, then the repercussions will be felt through all levels of government. Because so much in Federal funds are filtered down to state and local governments. And the dire possibilities sequestration may portend are under consideration in Maryland. For example, sequestration may require Moody's to downgrate the credit of the United States. If this happens, by corporate policy they will also downgrade Maryland's credit.
State Treasurer Nancy Kopp is trying to prevent this, and this article talks about her efforts and some of the other consequences of sequestration.
If there is sequestration, and I wouldn't be surprised if there is, there are going to be serious repercussions felt all through the economy. And not just the public sector. The private sector's going to be seriously affected as well. Except, of course, all those portions of the private sector that aren't affected by federal, state, or local funding, which is none.
Over the next few weeks expect to hear much, much more about sequestration. Tomorrow, expect to hear me opine about why sequestration could be a good thing.