In my City Talk column on Tuesday, I noted that the Savannah and Hinesville metro areas stand to be big losers if Congress and the President cannot come to a deal to forestall the sequester, which would mandate significant defense spending cuts beginning March 1.
Yes, we need to reduce deficits and debt over the long term, but the federal government has already made some serious policy moves to address those concerns. We still have a yearly budget deficit, but that deficit is falling faster than at any time since World War II. For real.
Either through spending restraint, revenue (tax) increases, or both, we need to continue to bring deficits down and stabilize — and then reduce — the debt. But that can be done over a period of years. Too many cuts in government spending or extremely steep tax increases will almost certainly put us back in recession.
As I noted in yesterday’s column, the pain of the hard cuts of the sequester will be felt most acutely by people in areas with large military installations.
From GPB’s Defense Cuts Feared in Georgia:
Gov. Nathan Deal says Georgia in particular has a lot at stake because of its large civilian military workforce.
“When you start having to cut or eliminate contracts with those who provide services and supplies to military installations, that begins to affect the uniform people at the installations but the civilians who are employed there,” he said.
Middle Georgia, alone, could face an immediate $83 million hit in payroll losses.
I haven’t seen any numbers broken down for this corner of the state, but the impact would be similarly large.
I think we should make some deep cuts in defense spending over time, but too much too soon will really hurt the nation’s economy.
Elected officials from the South generally and Georgia specifically have been among the most intractable in compromising on issues regarding the federal budget. If they’re unwilling to compromise this time to limit the impact of the looming defense cuts, it’s largely their own region that will suffer the most.