Predicting the fallout from defense budget sequestration is like trying to anticipate the damage as a hurricane barrels toward shore. We know it will be devastating and the long-term damage will be severe, but no one can say exactly where the havoc will be greatest or how complete the destruction will be.
With hurricanes, that uncertainty makes it hard to convince people to evacuate or make costly preparations against a danger that may or may not end up at their door. With sequestration, it makes it hard to break through the inertia and gridlock that plagues our politics—to get our leaders to act when the specific details of the automatic spending cuts under the Budget Control Act of 2011, known as sequester (including the regions and voters most affected), aren’t perfectly known.
Our business leaders’ hands are tied—putting the brakes on hiring and investment decisions. Slow hiring and limited new plant or research and development spending is a pretty poor recipe for accelerating a rather anemic recovery. We’ve already started to see layoffs as companies prepare for the worst.