The Cycle | July 18, 2012
>>> five months until those da yoen crohnian across the board budget cuts comeful congress can't agree on a new plan and a new report is putting a number on how many jobs could be cut as a result. the aerospace industry 's association which we should say will likely suffer lost profits if the cuts go through, claims that 2 million jobs would be lost. .cue bipartisan hysteria. so when i think about this, clearly, i mean, we should say the aerospace industry 's report is very self-serving. they are concerned about their profits and their sort of doing some fear mongering. that's not to say there won't really be jobs lost here, but to put it in perspective, is the defense industry 's profits overall have quadrupled over the past decade. if you are going to look at short-term deficit reduction which is a whole other conversation entirely, but if you're going to look at that, i think military cuts seem like the logical place to go. and the other issue i have with this is should we really be looking at our defense industry as a jobs program?
>> well, in the irony to me there's a certain irony of yes, this is bipartisan. the industry is very powerful. you're going to have a lot of democrats and republicans saying we can't do this. the same republicans who claimed the sim stimulus was a total failure that didn't create jobs and insisting there can be no further stimulus. even there was resistance initially to the payroll tax cuts. when you look at the stimulative effect of defense spending it's real but not nearly as significant as investing in public jobs. so have you these people who are suddenly believinging in government stimulus when it's feeding the defense industry who deny that the government can do anything to stimulate the economy in any other realm. i find that interesting.
>> there are plenty of republicans who acknowledge we need to make cuts across the board and put up defense as a sector to look at. i think you're right that defense isn't necessarily, we shouldn't see defense as sort of a job creator, it is. and as biased as you think the report may be, it also included and put up some of the numbers about the other sectors that are going to potentially lose jobs in health care close to 50,000 jobs lost, construction close to 100,000 jobs lost. 473,000 in manufacturing and 617,000 federal jobs. i mean, we can talk about where those numbers are coming from, but clearly, the cuts we're looking at are not just going to impact defense.
>> right. so that brings me to my other question, which is, given the fact that we have over 8% unemployment, we have interest rates that are basically at 0% so you couldn't borrow money basically for nothing, and our inflation is below the fed target of 2%, why are we doing short-term immediate term deficit reduction at all? why are we doing it? i don't understand that.
>> i think we're looking at a lot of bluffing on both sides. liar's poker all around. the republicans are not going to let the pentagon budget be cut, the democrats won't let taxes go up and people making $80,000. very little of this is going to happen. as soon as we get to a new president or a new -- through the election, then we're going to make a deal and move on.
>> you're saying sequestering is not going to happen, that we're going to address this before?
>> i'm not at all.
>> on the defense cuts, because as steve was pointing out, there's so many districts across is the country, democrat and republican who are looking at the money that they get and the jobs in their district who aren't going to go along.
>> i wouldn't say we're going to have a deal at all. the most likely thing at this point, democrats are talking about letting that december 31st deadline come and go which would trigger all of the taxes to return to the pre-bush levels and at that point, that might be the only way you could get republicans who for 22 years unanimously opposed any tax increase, that might be the only way to get republicans to say we'll do the tax --
>> a 59-year-old utah scientist who