What is Sequestration, and Why is it Bad?

Government spending continues to exceed government revenues, which means that the national debt keeps growing. Without a change in spending and taxation plans, the national debt will soon reach unprecedented levels. Such debt levels risk triggering a financial crisis.

Dealing with this complicated set of issues resulted in intense political debate during the summer of 2011. The result of the debate was the Budget Control Act of 2011 (known as the BCA). The BCA reduced planned defense spending by about $490 billion and established a congressional committee to recommend at least $1.2 trillion in additional deficit reduction measures. Continue reading “What is Sequestration, and Why is it Bad?”