Long story short, if you're a defense dove like me and have a nonutopian view of the domestic discretionary budget, then this looks like we're mostly talking about harmless spending cuts. It is very true that the current moment is not an optimal time to cut wasteful government spending. Given the high unemployment rate, the low and stable inflation rate, the low cost of federal borrowing, and the weird dynamics of "Evans Rule" monetary policy, I would say that 2013 is an excellent time for the federal government to waste some money on make-work military contracting gigs. But in the grand scheme of things, wasting resources on low-value programs is not a great idea, and there's more to life than timing.
Spoken like a man halfway to David Brooks' View From Nowhere. Steve M. rips into Yggy and rightfully so:
Maybe there's more to life than timing for you, Matt, a fast-track journalist who's skipped effortlessly from excellent career-building job to excellent career-building job in the past decade, but for the ordinary schmucks who've waited years for a genuine ray of hope in their economy, the one that seems to have permanently high rates of unemployment, timing is everything -- as in, these people need a break now.
What Yglesias says in the lead-up to that statement is absolutely correct: we should be doing far more to put money in ordinary people's pockets. I don't care what it is: I'd take "make-work military contracting gigs" or a huge infrastructure repair program or any other way you could make it happen. Whatever will inspire people go to the mall next weekend. Whatever will flow money through the rest of the economy.
If military contractors are laying people off, retailers in regions where military items are made will suffer. If federal workers are experiencing one-day-a-week furloughs, their ability to spend drops 20%. And on and on. And, of course, this happens in an economy where most people barely have an economic cushion -- I bet Yglesias has one -- so how far will some of these people sink, even if the cuts are temporary?
Excellent point. Real people are going to get hurt here, and it's important to remember that.