Sequester Certainty

Given Republican unwillingness to raise taxes and Democratic insistence on it, the delayed automatic $110 billion sequester will kick-in on March 1st. This will reduce GDP growth by 0.75% and guarantees a weak first half of ’13 as the economy is already painfully digesting the two percentage-point Social Security tax hike that began 1/1/13. The good news, the Congress will pass another continuing resolution keeping the government operating through 9/30/13.

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  1. The economic head winds are gaining strength – i.e. negative GDP growth in the the 4th quarter. We’re in malaise at best and a deep recession at worst. This administration is clueless and will only be worse in the 2nd term as the focus will shift even more so to ideology and social initiatives. Pray we make it through these next four years with damage at a minimum.

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