As a political gamble, the threat of sequestration promised the possibility of a satisfying budget bargain that would solve a wide variety of fiscal problems. However, failing to reach an agreement made the whole ploy fraught with risk and thus so unattractive that if an investment had similar risk/return parameters, no sane person would put so much as a penny into it.
Assuming that the infantile shenanigans in Washington will continue and there will be no agreement on the budget, automatic across-the-board cuts will take place tomorrow, with all sectors getting the axe. From social programs to defense, billions of dollars in reductions will take place. For some time, pundits and politicians have been moaning about sequestration, but polls show that most Americans are quite sanguine about it all. This should come as no surprise, since, unless it's you who is being furloughed or your program that's being reduced, you are likely to be unconcerned.
The loss of some components of military readiness---including the availability of ammunition, fuel and repair parts---will have a deleterious effect on national security almost immediately at a particularly sensitive time. But although the cumulative effect of sequestration won't actually be felt for a while, Americans should at least understand that the behavior of our politicians demonstrates their stunning lack of dedication, skill and professionalism.
However, this sorry mess is nothing compared with what will happen soon if Washington fails to raise the nation's debt limit. With an inability to borrow more money, the United States will not be able to pay all its obligations. Although this is a significant problem in its own right, it may be accompanied by a self-reinforcing variety of other unpleasant consequences, including the loss of confidence among the international markets. Economies around the globe, most of them already fragile, may find the result too much to bear.
To be sure, there is plenty of fat in our budget, and it must be cut. We have to do a better job of matching revenues and expenditures. Interest rates are at historic lows, but we must be careful not to create an environment in which they rise precipitously. All these things are within the capability of our leaders in Washington, but leadership in that city is something that seems to be sorely lacking.
American government has always been an awkward combination of structure, process and personality, and Washington has a long history of forsaking the public good for party or personal gain. But the fact that politicians have often exhibited odious behavior is no excuse for it today, and the sheer irresponsibility of the Congress and the White House is so striking that one would be justified in concluding that the nation is being betrayed by the very people who have sworn to serve it.