Economic Outlook: The name of the game

By ANTHONY HALL, United Press International  |  Feb. 20, 2013 at 9:45 AM
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The sequester debate in Washington shows lawmakers haven't changed playgrounds, they have just changed the sport along with the changing seasons.

Essentially, it is the same game that changes names from time to time. It was originally called The Debt Ceiling Game and then it became known as Taxes. Today's game is very similar. But it is called Spending Cuts.

OK, that name didn't stick. The marketing people didn't like it. So now it is called Sequester, which means automatic spending cuts, which were put into effect back in the Debt Ceiling days.

Like Debt Ceiling and Taxes, Sequester is mostly a blame game. With that in mind, President Barack Obama strode up to a microphone Tuesday flanked by first responders in an attempt to beat Republicans to the emotional punch. Republicans then struck back with House Speaker John Boehner, R-Ohio, calling the president "gutless" for wringing his hands over spending cuts with a blatant display of emotion-baiting but without any spending cut plan of his own to discuss.

The blame game isn't going to go well for Republicans. They are playing hide and seek, calling for spending cuts, but attempting to avoid taking the blame for cutting back on spending during a slow economic recovery.

The goal of the game is critical. It is either to lower the federal debt and protect as many jobs as possible or it is to protect jobs and lower the debt as much as possible. The different priorities can help identify the various players, especially when they start one of those behind-door scrums and both sides are wearing the same blue-gray suit.

There is a deadline, as well. If a new spending plan isn't put in place by March 1, then the automatic cuts go into effect. On Tuesday, Macroeconomic Advisers, a research firm, said the cuts already penciled in would push the unemployment rate up a quarter of a percentage point, which equates to the loss of 700,000 jobs.

The economic recovery is already sputtering, because the dramatic drop in the unemployment rate in 2012 was largely the result of workers giving up rather than the result of new jobs created. With that in mind, businesses with various lag times are reacting to the realization that the recovery is far thinner than previously thought.

Maybe Washington needs a change in semantics to help clarify the goals. The name of the game is not Spending Cuts or Sequester, it's Austerity. No one wants to admit it, but that's the process that is playing itself out in Washington and with no one using the word that means the austerity process in the United States is, essentially, leaderless.

In international markets Wednesday, the Nikkei 225 index in Japan added 0.84 percent, while the Shanghai composite index in China rose 0.6 percent. The Hang Seng index in Hong Kong gained 0.71 percent, while the Sensex in India climbed 0.04 percent.

The S&P/ASX 200 in Australia added 0.33 percent.

In midday trading in Europe, the FTSE 100 index in Britain gained 0.47 percent, while the DAX 30 in Germany gained 0.18 percent. The CAC 40 in France shed 0.19 percent, while the Stoxx Europe 600 slid 0.08 percent.

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