Sunday, March 3, 2013
That's the amount of the total sequester, once fully implemented (initially it is only half of that).
Listening to liberal talking heads, a cut of that magnitude is the end of the world as we know it. It is soooo much money all at once, it will give a negative jolt to our economy that will plunge us into recession, decimate our military, put children out on the streets begging, and cause all sorts of other calamitous consequences.
But it just so happens that $85 billion is the amount of new money that the Fed is pumping into our economy each and every month, to buy worthless (no one else wants to buy them) bonds of the US government ($45 billion), and mortgage-backed securities ($40 billion).
The goal of the devastatingly harmful policy is dual: (i) to mask the fact that no one wants to buy these securities, and (ii) to artificially keep interest rates on both low to avoid the draconian consequences of allowing rates to rise naturally.
But the cost of this pleasure-today, pain-tomorrow policy is going to be tremendously steep for our nation, the rapid de-valuing of the American dollar, and eventual steep rises in inflation and interest rates.
America is on a collision course with the laws of mathematics, and they dictate that a brick wall is in the middle of our road ahead.