Many economists warned that the recent austerity measures (aka sequestration cuts) would slow the economic growth and negatively affect the nation's slowly improving jobs situation. Now it looks like that may already be happening. As of last Friday, 271 companies had reported their sales and only 38% of them reported an increase. As a whole, the aggregate sales of those 271 companies actually fell by 1.45%.The nation was expected to have a weak 2% economic growth for 2013, but after looking at the declining sales figures some are predicting it could be even lower. Personally, I think those cuts could make the economy slip back down into negative growth (throwing the nation back into recession (defined by three quarters of negative economic growth). This would make life much harder for the residents of Main Street -- who still have not shaken off the effects of the Bush recession.
This should not come as a surprise to anyone. Pulling money out of the economy in hard times almost has to result in economic slowdown, and that is exactly what the sequestration cuts did -- it pulled millions of dollars out of the economy. That means people relying on government help will have less money to spend, and businesses will be hurt by that drop in spending. And with stagnant or falling sales, businesses don't hire new workers (and may actually start to lay off workers again).
The new unemployment numbers of the Labor Department will be released next friday for the month of April, and they are expected to be weak (showing little new hiring). And now that the new Republican-inspired austerity is starting to kick in across the nation, we can expect poor unemployment numbers for the next few months (and that is a best-case scenario).
When are we going to realize that the low taxes for the rich and deep cuts for everyone else is just the wrong thing to do in troubled economic times like these? Austerity has never cured a recession. It only delays any recovery from recession, and that is what is happening now.
