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CPA Offers His Take on Sequestration Frustration
YOUNGSTOWN, Ohio -- For those of you who are back up on the ledge following the wolf cries of both the Mayan calendar doomsday and the fiscal cliff catastrophe; relax.
The much-discussed “sequestration” or “sequester” that politicians have been lobbing back and forth like a lethal tennis ball in a Venus sisters showdown has already bounced its last. March 1 has come and gone without the annihilation of the civilized world.
That’s because this latest wrinkle in the seemingly endless debt ceiling debate contains a built-in stop gap that prevents any government spending cuts to occur until much later this month…if Congress cannot come to some type of agreement on the federal budget, which could help avoid the cuts outright.
Clearly a majority of Democrats favor tax increases to combat the national debt issue while a sweeping number of Republicans appear to prefer spending cuts as the answer to the problem.
The bottom-line question that concerned consumers continue to have is: What does it all mean to me, my business, my finances and my future? The answer remains unclear at present, particularly because it is still not evident whether either side will move toward a compromise.
However, assuming that the government spending cuts do ultimately take effect, certain constituencies will notice consequences. For instance, those working in government-funded contract industries, particularly those affiliated with defense, may notice some negative impacts on employment. Likewise, anyone who works for a national park may feel an economic pinch, as could those communities which depend on them for tourism.
But for many in the private sector, there may be only slight noticeable changes as a result of government spending cuts, again, if and when they take place. The job market on the whole could remain challenged and wage growth may continue to stagnate but this trend is certainly not new for business owners. It may simply mean an unfortunate continuation of the flat economy we have been seeing for the past several years.
Stay tuned as the story continues to unfold from our nation’s capital . . .
EDITOR'S NOTE: The author, David Blasko, is a certified public accountant and the principal in charge of the Youngstown and Boardman offices of Hill, Barth & King LLC. He can be reached at [email protected] or by calling 330 758 8613.
Published by The Business Journal, Youngstown, Ohio.
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