The sequestration was a political scheme to allow the debt-ceiling to rise without any reduction in the continual overspending of the federal government. Instead the political class proposed to go ahead & raise the debt ceiling now and appoint a super-committee to work out a plan to reduce spending sometime in the next 10 years. As a motivating tool they included automatic across-the-board cuts (the sequester) that were thought to be so bad that the committee would surely find a better solution. They passed the bill, the President signed it, and they all patted themselves on the back for such good & clever work!
Guess what? The committee did not fix the issue & so the Sequestration loomed … but it was a ways off & the elections were coming and the politicians did not want to work on something so difficult when they had other things to do, so naturally nothing was done.
Well, time marches on … and Surprise! — that pesky Sequestration is back and so is the debt-ceiling. Now again they find themselves in a bind with no easy way out, so the finger-pointing goes on. Instead of continually claiming it is someone else’s fault, maybe the politicians should try to work out a solution. We raised the debt-limit before and likely will continue to do so, we have raised taxes on the top earners, we have re-instated the full payroll tax & those things have taken effect now … maybe they need to find some way to reduce spending, even a little bit, and to do that now instead of in the future / next 10 years. Surely there is some waste & overspending somewhere in the entire federal government, so let’s work on that.
Sadly, I am not very hopeful. In the stock market, past performance does not guarantee future results … if only that were the case with the political class.