Secretary Panetta and General Dempsey appeared on several talk shows this morning. One of the areas discussed is the impact of the impending sequester on defense spending. Panetta has continually warned that the sequester would significantly impact the ability of the military to carry out its mission.
They have discussed the nature of personnel cuts that will be made to meet the sequester requirements. If I am not mistaken, General Dempsey said they were looking at reducing the work week by 2 days accompanied by a 20% pay cut. That is bad for the economy and, of course, bad for those workers subject to the cuts.
So far so bad...but wait...there is worse news and it takes the form of of typical political chicanery. Remember we are in the midst of a tepid recover and unemployment remains high. We also know that Obama likes to tout luke warm economic advances especially now that unemployment rates have seemed to improve (not if you look at the underlying numbers and trends). Remember also that the monthly employment reports includes both full and part time workers (a part time worker is defined as a worker working one or more hours a week).
Now, if I understood the General correctly, those workers having their days and income cut back under the sequester would NOT APPEAR AS A REDUCTION IN EMPLOYMENT, AND THEREFORE THE UNEMPLOYMENT RATE WILL NOT GO UP...PRETTY SNEAKY. Fewer days...less income...bad for the economy. Ability to hide the impact of the job time reduction on total employment...good for the Obama spin machine.
It gives me a headache just thinking about it.