ANOTHER BOOST TO THE ECONOMY – AT 8:45 A.M. ET: The Pentagon is taking a budget hit, and it's not only our national defense that's at risk. Our economy will be impacted almost immediately. From the Washington Times:
Defense contractors already are preparing for the layoffs and plant closures that will occur if Congress fails to reach a deal on the federal deficit this year, triggering $600 billion in automatic Pentagon spending cuts.
“We are running towards a cliff, all telling each other like lemmings that somehow this isn’t going to happen,” said Marion C. Blakey, president and CEO of the Aerospace Industries Association (AIA). “But the cliff is coming up.”
The looming threat of the automatic cuts is causing defense and aerospace companies to make legally required stock market disclosures about possible lost earnings and to consider notifications to workers and suppliers about layoffs and contract cancellations, said AIA Vice President Fred Downey.
An AIA-commissioned study found that, if the automatic cuts occur, about 1 million jobs will be lost directly by contractors and indirectly by subcontractors and others companies in the cascade of consequences resulting from plant closures and mass layoffs.
The jobs that would be lost in the aerospace and defense sector are “good, high-paying, high-tech jobs” that pay up to twice the national average wage, said Mrs. Blakey.
COMMENT: Swell. Really swell. Another million jobs. Back in 2009, when Obama could have actually done something about the economy, he was advised by sane heads to increase defense procurement to replace equipment worn out or lost in Iraq and Afghanistan. The assembly lines were ready. The equipment was needed. The increased work force was available.
But no. Obama's aversion to military spending, which he shares with the predominant wing of his party, wouldn't let him do the obvious. Instead, we spent a trillion dollars on a "stimulus" program that did no stimulating.
Now we're in danger of a further economic catastrophe. That military equipment is still needed, though. Will someone please say something? Quickly.
May 18, 2012