February 26, 2013
While President Obama is traveling across the nation campaigning against sequestration at the very last minute, the economy is working through a tax increase nearly twice the size of the sequestration cuts for fiscal year (FY) 2013.
The President knew for more than a year that sequestration was looming and yet showed no leadership on finding more deliberate spending cuts that set priorities and put the nation’s fiscal house on a solid foundation.
President Obama said in a recent press release on the looming sequester:
And here’s the thing: They don’t have to happen. There is a smarter way to do this—to reduce our deficits without harming our economy.
Indeed there is. But it’s not the way the President would have you believe. The President argues that sequestration would hurt the economy and calls for more tax increases instead. But failure to rein in spending and raising taxes is a recipe for economic stagnation.
Excessive government spending and a skyrocketing national debt are slowing growth and job creation over the long term. Federal spending is crowding out private investment and job creation, and the U.S. debt is quickly growing to economically damaging levels.
Tax increases, especially on investors and small businesses, also hurt economic growth in more than one way.
1) By taking more money out of the economy that could otherwise have been spent on growing a business and hiring workers; and
2) By changing the incentives against productive work and investment, which slows growth over the long term.