One negative consequence of a government spending trillions of dollars it doesn't have is that lots of people have a stake in that spending. Any attempt to curtail that spending is met with ferocious lobbying and howls about the "end-times" approaching. So too with defense contractors, whose executives convened a press conference yesterday asserting that Congress simply must raise taxes to avert looming defense cuts.
They called for tax increases and spending cuts as part of a plan that will remove the uncertainty that has already sparked layoffs in their industry, slowed investment and made it harder to recruit top high-tech talent.
While I believe that defense spending cuts have to be on the table in order to fix our fiscal books, across-the-board cuts, like those included in the sequestration, are probably unwise. Of course, these can be avoided if Congress finds an equal number of cuts elsewhere. Because we are using a 10-window for these talks, Congress and the President just need to find a little more than $1 Trillion in cuts out of more than $40 Trillion in spending.
The Defense Department alone will spend close to $10 trillion over the next decade. Hard to believe we can't find $500 billion out of that in wasteful or redundant spending. But, no, instead we have to raise taxes. I will long remember that the Defense industry just threw taxpayers under the bus.
Follow me on twitter