Back on the Internet; Sequestration and the Coming Depression.

The View From Chaos Manor ^ | February 23, 2013 | DR. Jerry Pournelle

The President has excoriated the Republicans for not bailing us out of the sequestration which is going to end life as we know it. He says the only way out is to keep borrowing more money – the sequestration was his idea on how to insure that we did some spending cuts when we raised the debt ceiling, but he has forgotten that I guess. Now the only hope for the nation is to raise taxes. Supposedly on the rich because there are plenty of tax rises that will affect us all coming inevitably.
The notion is to blame the coming Depression – and that looks to be inevitable – on the sequestration, although we will be spending more next year than we did last year, and more the year after that than we will this year: the sequestration will not be a “cut” in the budget, merely a diminution of the increase that is automatically built into the budgets we don’t pass any more. And Obamacare will cost a lot of money, the 2% increase in salary tax (as opposed to income tax which hits what’s left after the 12 to 20% salary tax), inflation, raise in minimum wage, and other economic disincentives will cost more, and the incentive to expand a business is lowered, fewer businesses start – maybe we won’t hit a full Depression, but the probability is there. We are doing it to ourselves.
Minimum wages of course hit those entering the work force; they don’t yet know how to make money for their employer, and as we make it harder and harder to fire incompetent people, the reluctance to hire them to earn more than they are worth in the hopes that they will learn to produce enough to earn their starting salaries — well, you get the idea. And the schools which ought to be teaching people to be worth at least minimum wages have not been doing that – it is unlikely they will get better at it so that graduates will be worth a higher minimum wage.
Ah. Well.