Indiana News

Expert Explains Sequester Effect on Economy


The sequester will affect the economy, but an economic expert feels it won't likely affect the economy as much as the Obama administration has stated.

Ball State's Mike Hicks says he thinks the affect will be dependent upon how robust the economy is. He says with big cuts in incomes last month, and with the increased unemployment in Europe and Britain entering a third recession, he isn't putting a lot of dollar value on the robustness of the U.S. economy right now.

Hicks says it's tough to tell which cuts will hurt the most. He says the Obama administration has made the politically tactile move of making the cuts appear as painful as possible. He says some of the decisions, such as not deploying a carrier group or grounding an Air Force fleet are done for political reasons. He says those costs will balloon down the road, but he says it's important to remember the deficit is so large that a couple hundred million dollars in maintenance costs will amount to white noise.

He says a positive about the sequester could be that the country finds out spending less could help.


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