Home > Politics > Sequestration: Has the US Government Cried Wolf Too Many Times?

Sequestration: Has the US Government Cried Wolf Too Many Times?

boy who cried wolfRemember a few months ago when all the rage was worrying about falling off the fiscal cliff? Our elected officials put on their masks and capes and saved us at the very last minute to avoid financial disaster in the US, or at least that’s what they hoped we’d believe. In reality, our leaders in Washington put off figuring out a solution that might help the United States balance our budget. They can’t agree on what everyone’s fair share of taxes is or how to control spending. As of March 1st, we are now hearing all about Sequestration and what it will do to the economy. Other than the media, it seems that no one is getting too worked up over all the spending cuts that make up sequestration. I think it’s because the US government has cried wolf too many times. We’ve gotten so used to all the posturing and deal making that the average citizen just tunes it out.

What is Sequestration?

For a much better analysis that I could ever give, read Jose’s post at The Wise Dollar.  Basically since our federal government hasn’t balanced a budget since Clinton was in office, and we have over $16 trillion dollars in debt, sequestration was put into law in 2011 with the (don’t laugh) Budget Control Act. It calls for $1.2 trillion dollars in across the board government spending cuts  over the next ten years, with $85 billion set to go into affect this year. Elected officials essentially passed the buck again, figuring that spending cuts would be so severe that future lawmakers would have to amend this bill.

Well, our top notch team who are hanging out in Washington haven’t been able to agree on anything, so the first cuts went into affect last week. You’d think anyone who is a member of the economy would be getting nervous, especially if you work or depend on the federal government for your income. I’ve found just the opposite.

The Government is Like the Boy Who Cried Wolf

We all have heard the fairy tale about the boy who cried wolf. He lied so many times about seeing a wolf that the villagers stopped coming to help him out.  When the wolf really showed up, no one believed him, and all his sheep were eaten.

The federal government and the media have gone down to the wire so many times, telling us we are doomed and the economy is going to fail because the party of choice is not willing to compromise. We’re all going down in flames. Stock up your canned goods and hide the money under the mattress.

At the last second, Joe Biden or Mitch McConnell or the politician of the day shows up and finds a way to keep our economy on track so no one has to deal with spending cuts. It’s gotten to the point that no one takes this stuff seriously anymore. Last week our local paper had an article about the different government agencies that would face huge cuts if sequestration goes into force. Here’s what the agencies had to say.

“We have not made any contingency plans yet. Until we get further information. It’s fruitless”-Durango City Manager

“It’s too early to identify cuts. Right now we don’t have anything.”-Public information manager at Mesa Verde National Park

“At this point, it’s hard to for us to prepare for anything. We’re kind of waiting to see what happens.”- Fort Lewis College spokesman

“I think everybody’s hoping for a best case scenario.”- Durango School District Chief Financial Officer

Is it Any Wonder Why People Can’t Get Ahead Financially?

Let me be the first to say that we cannot depend on the government to take care of our finances. My five year old does a better job with budgeting and spending wisely than any politician of the past decade. John at Frugal Rules had a great post on why we can’t model our finances after the government, and I totally agree.

However, if this is the example that we see every day, it has to play a part somewhere. From the government, we learn how to fail.

  • No budget
  • If we can’t pay our bills, take on more debt
  • We can’t seem to curb spending
  • Failure to compromise on tough issues
  • Blame our failures on someone else
  • Pass the buck to the next guy
  • Cry wolf so many times that your credibility is gone

It really makes me sad. I love the United States and everything it stands for, but I am really tired of all the posturing and politicking that takes place for the sole purpose of keeping donors happy. I can’t solve the government problems we are facing. All I can do is try my best to be an exact opposite of everything the government is doing financially and try to be prepared when the wolf finally shows up.

What are you doing, if anything to prepare for sequestration? For my non-US readers, do you think our politicians are all a bunch of ninnies?

About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. I have friends that work in different depts of the federal govt, and it’s mostly a non-issue for them so far. One is having his department shut down, but that could take 6 months - and all the people are going to be shifted to other departments. They’re just not hiring anyone new.
    Mrs. Pop @ Planting Our Pennies recently posted..PoP Balance Sheet - February 2013My Profile

  2. The main thing I hate about all of this is that these so-called grown up men and women can’t even talk and negotiate. What a bunch of jokers. I hate how the President gets on TV with police officers and fire fighters telling the nation that because of Republicans, we can’t pay police to keep you safe and that your house will burn down because there won’t be any fire fighters and how planes are going to fall from the sky because we can’t pay flight controllers. I’m waiting for the press conference telling us that we are going to have to go without the sun for a few weeks because we can’t make the payment to it.

    The only change I’ve noticed is by brother-in-law being told he will be furloughed. The funny thing is though, he is still working normally until they figure out how much to furlough and how it will work.
    Jon @ MoneySmartGuides recently posted..Beating the Unsteady Economy: How Businesses Can Stabilise Their FinancesMy Profile

  3. First off, thanks for the mention Kim! Secondly, this whole thing is just absolutely ridiculous. The politicians, largely, created this whole issue and then spend time posturing and smiling for the cameras when neither side will do much of anything. To think that we as a whole re-elected such a large majority of them is nothing short of insane in my opinion. Add the media hype around it and it just has become one giant mess.
    John S @ Frugal Rules recently posted..Things That Make Me Scratch My HeadMy Profile

    • I bet if they were the ones getting salaries or campaign money cut until they made some progress, it would be a different story.

  4. Thanks for the mention Kim! The whole thing is frustrating, more so because the politicians are letting it happen and then pointing the finger at “the other side” and saying “look what they did”. Did you know that the White House has pretty granular control over what gets cut? Have you noticed that the cuts being made are those that have the most visibility (without going over the edge which would backfire)? It makes you wonder who’s best interest they have in mind, the country’es or their political agenda. As for congress, never forget that a group of baboons is also called a congress…. How apt :D
    Jose recently posted..Investing in Stocks and The Stop LossMy Profile

    • A group of baboons about sums it up. I don’t even know if they are aware of what needs to be done at this point. It’s all so sensationalized and put on for press ops. Maybe we should try real baboons?

  5. My current favorite politician is Rand Paul, and I think he’s saying the right things when it comes to sequestration: these cuts are not enough, the cuts are not being prioritized correctly (cuts are being made to politically sensitive areas, he has a plan where there would be zero job cuts because of sequestration), and above all that sequestration is a good start to getting our financial house in order. It’s a sad day when doing the complete opposite of the government when it comes to finances is a GOOD thing.
    DC @ Young Adult Money recently posted..Why I am reconsidering getting my MBAMy Profile

    • He’s from Kentucky:)and very popular there. If you are 16 trillion in debt, something has to be cut. To keep restoring everything and passing the buck is not going to solve anything at all.

  6. It is scary how poorly governments look after your tax dollars. In Australia most of the people that make it into government are lawyers not accountants. I often wonder if we would be in better fiscal shape if that was reversed.
    Glen @ Monster Piggy Bank recently posted..Forex Currency Trading Basics For Beginners - Part 1My Profile

    • I think politics is politics regardless of your background. Many politicians have run successful businesses, so you’d think they could bring that knowledge, but apparently not.

  7. The worst part is how many of the people that are leading us down this path continue to get re-elected and we continue to believe them. The fact is that they tell us what we want to hear, we believe them, they break their promises, we get upset, but then they start the whole cycle over again. Real change doesn’t happen in this country because the election system is designed to put into office those with the deepest pockets, not those who will actually get anything done.
    Money Beagle recently posted..Get That Bread Out Of Your RefrigeratorMy Profile

    • I don’t know if any of the opponents in the last elections would have been any better. It seems they all do the same thing just for one side or the other.

  8. Kim, great article. The most frustrating part of this for me is that they are cutting so many necessities and then continuing to spend on non-necessities. As for us, we’re doing the only thing we can do to prepare for sequestration: improving our own financial situation by getting out of debt and increasing savings.
    Laurie @ The Frugal Farmer recently posted..Decision TimeMy Profile

  9. We’re watching extremely closely. Liam works for an entirely government-funded social services program that looks like it’s going to have about a 7% cut in its funding, and they haven’t made up their mind yet about how they’ll absorb it, but they could be cutting staff :(
    Sara recently posted..Wealth health, March 2013My Profile

    • One of my jobs is at a government clinic. If they have to cut services, I am one of the newest additions, so it could be me. It is worrisome, but hopefully I have enough different things going on that I could cover it somewhere else if I lost that income.

  10. Will Sequestration affect me, I doubt it. Remember it was set up to motivate sensible cuts to the federal budget. It didn’t! I think our government looks dysfunctional and there is little hope that they will get together to solve our country’s problems. I wish everyone would participate in the election process and elect people who are interested in solving problems rather than stand on doctrine or party lines.
    krantcents recently posted..Road Map to Success – A Personal StoryMy Profile

  11. Our government can’t seem to get their act together regarding a budget and it is truly ridiculous. We elect these guys to get the job done, so they need to do it!
    Mackenzie recently posted..Movin’ On UpMy Profile

    • I think we should withhold all campaign contributions and salaries until there is a realistic budget. That might light a fire, or maybe not.

  12. You’re politicians are as bad as ours here in Canada…especially in Ontario. Both our governments don’t have a collection/acquiring money issue; they have a spending issue. There is enough money for all the services needed if it was spent properly. Business people and anyone who runs their home on a budget gets this.
    Leslie recently posted..Time & MoneyMy Profile

  13. You’re spot on, Kim. The average of American is so tired of this that they don’t even care anymore. There is so much posturing, finger pointing and name calling that I’m embarrassed for them and embarrassed to have voted some of these individuals into office. Children behave better than them. Today it seems about being right and passing blame rather than accepting responsibility and searching for solutions. We do live in a great country and I’m proud to be an American too. And like you, I plan to govern my own budget wisely so regardless of what happens in Washington, I should be okay.
    Shannon @ The Heavy Purse recently posted..Meet Shannon Ryan: Financial Literacy AdvocateMy Profile

    • It is sad to see the apathy in people regarding political issues, but I think most people feel like it doesn’t matter and their vote gets them nowhere. I kind of feel that way myself sometimes, but like you said, I just have to get myself in order, hope for the best, but plan for the worst.

  14. It’s hilarious that the market just hit an all-time high during the “sequestration”. My gosh, if anyone personally managed their money, or their companies money the way the government does, they would be tarred and feathered and hung out to dry. I mean seriously.

    But hey, kudos to whomever put the “Budget Control Act into place. I’m assuming it was someone from the news media, because they know that there’s nothing to talk about after the holidays…
    Jacob @ iHeartBudgets recently posted..Redecorate For Free: Family Room ProjectMy Profile

  15. Well, the comic I read about grad school life is pretty upset about sequestration. I think his budget got cut because of it. :)

    Sequestration could affect me; I never really bothered to look into how it would affect road construction budgets. That said, you could say I’m taking steps to prepare because most of my job searching for the past three months have been outside of that industry (even though not for this particular reason)
    Edward Antrobus recently posted..February 2013 Net Worth UpdateMy Profile

    • I think there will always be pork projects, and it seem Colorado always has plenty of construction, but it never hurts to diversify.

  16. The whole thing is sad really. Our elected officials are so incredibly polarized that they cannot agree on anything at all. Spending cuts were inevitable I suppose but this all reeks of incredibly bad planning.

  17. I wish that we’d take Buffet’s advice and just fire all politicians every time the budget isn’t balanced. Then we might see some results. Honestly though, unless we have some type of revolution I don’t think much is going to change. Actually, I fear it may get worse with divides and stuff. I don’t think the results of the sequestration will show until it’s too far gone though.
    Justin@TheFrugalPath recently posted..Planwise: The No Personal Data Financial ToolMy Profile

  18. There isn’t going to be public outcry over sequestration. Who’s going to shed a tear if they’re not the one being furloughed?
    mbhunter recently posted..Prepare for federal employee furlough with a furlough practice budgetMy Profile

    • Furloughs are a bit strange to me. They furloughed the teachers for a couple of years, but did it during Thanksgiving break so it just seemed like a longer vacation. Furlough on a regular M-W, and maybe people would notice more and get the point.

  19. “I think everybody’s hoping for a best case scenario.” - that’s the scariest quote of all. We’re all on a boat, it’s headed for a waterfall, and we’re hoping for a best case scenario.
    AverageJoe recently posted..Dow Reaches All-Time High: Is Now The Time To Invest?My Profile

    • The best case might just be to let all the cuts go through and go from there, but I know I would be affected in some areas, so it’s hard to be Ok with that, but we have to start somewhere.

  20. Thanks for the summary - I’m Canadian, so I’ve been aware of the situation without really knowing the details!
    Cat recently posted..An evening with Gail Vaz-OxladeMy Profile

  21. The government loves to paint gloom and doom scenarios, because they believe that this is the acceptable path at growing government. Case in point the 2009 Stimulus bill. “We need to spend and invest in the economy cause it is not growing”. Well is has shrunk since all that spending.
    Jim recently posted..Death Panels Phooey, Here Is How It Will Really WorkMy Profile

    • I think the soap operas my Grandma used to watch were kind of like that! Maybe Washington has turned into Days of Our Lives.

  22. I could care less about the sequestration, which will be solved in the traditional way. We’ll wait until a bit after the artificially imposed deadline, and then come up with a needless complex plan to kick the can down the road so that we can go through the standard script of finger pointing and name calling yet again. Since that’s way more productive than actually addressing the problem.
    My Financial Independence Journey recently posted..All About the Emergency FundMy Profile

  23. Congress is only crying wolf if you won’t be affected by the cuts. I teach at a Junior High School in Phoenix and since we are a Title I school we will have to make cuts including the possibility of laying off staff. I haven’t received a raise in 6 years and now this. Really disappointed in the dysfunction in Washington!
    Paul @ The Frugal Toad recently posted..Budgeting Tips: How to Stop Spending Money on Things You Don’t NeedMy Profile

    • It seems schools are one area that have had cuts for years while lots of other, less valuable programs IMO, keep their funding. Even though federal funding does affect schools, the state has to set the budget. Unlike the federal government, the state budget (at least in Colorado) has to balance, and education keeps getting cut further. Our district hasn’t laid off teachers, but aides have been cut and retiring positions are not filled. I hope your job is safe. It is scary.

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