Economic Outlook: This resembles austerity

Nobody likes spending cuts but the champion of that attitude is clearly President Barack Obama, who seems to have a very clear pain-avoidance agenda.

Recently, House Speaker John Boehner called the president "gutless" for standing up to a microphone flanked by first responders, heroes in uniform, and wringing his hands over spending cuts that would include the loss of jobs for some of them and, at the same time, skipping any mention of spending-cut proposals that would get deficit reduction rolling.

The president, knows that sequestered spending cuts that are already in place already give Democrats an advantage, because they lean heavily on traditional Republican strongholds of defense contractors and the military. As such, the president can hold out knowing his rivals are feeling more pain than he is if he just stalls long enough.

This is truly not the way to hold the debate on how large a military the country should support, but that is an argument that is always poisoned with partisan favoritism anyway.

Despite the pain-avoidance principles that define weak-kneed leadership, it is not so unfair to tell Republicans that, at this point, if they want to save military jobs, they should find the means to pay for it. Republicans like to pretend that the military is such a sacred cow that it transcends tax collection. But every salute out there is paid for by taxpayers. The military budget is often camouflaged stimulus -- an economic subsidy under a different name.

That said, the federal budget is on a collision course on a number of fronts, compliments of people in a demographic bubble -- the baby boomers -- who are getting older now and will put enormous pressure on Social Security, healthcare and other entitlement programs where making any change is a political poison pill. It is simple enough to raise the retirement age and save billions of dollars. But doing so, of course, would anger constituents hoping to retire and it would raise the unemployment rate, another sacred cow.

Postmaster General Patrick Donahoe has recently called for the Postal Service to drop mail deliveries on Saturday -- which means the loss of pay for many, but the loss of jobs for none. More recently, U.S. Defense Secretary Leon Panetta said civilian military personnel would be on furlough for one day per week from April to late September, when the fiscal year ends, if the plan for $85 billion in automatic spending cuts becomes law on March 1.

Again, that means a serous loss of income -- about one twelfth of annual pay -- for many, but no jobs lost.

Guess what? This is what austerity looks like. The fewer line items that lawmakers can slash means more of these customized furloughs are in order. That kind of last-resort solution is unfortunate, but it is unlikely those kinds of measures will go away soon.

In international markets Friday, the Nikkei 225 index in Japan added 0.68 percent and the Shanghai composite index in China lost 0.51 percent. The Hang Seng index in Hong Kong dropped 0.54 percent and the Sensex in India shed 0.04 percent.

The S&P/ASX 200 in Australia gained 0.76 percent.

In midday trading in Europe, the FTSE 100 index in Britain gained 0.72 percent while the DAX 30 in Germany advanced 0.62 percent. The CAC 40 in France climbed 1.36 percent and the Stoxx Europe 600 rose 0.9 percent.
ANTHONY HALL || United Press International

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