WASHINGTON - As economic policy goes, experts say, the automatic spending cuts that kick in today are - to use a technical term - boneheaded.
Fortunately, sequestration isn't going to leave a deep scar on an economy that is otherwise looking pretty good. It's a fiscal speed bump on the road to economic recovery.
"Businesses and consumers have begun to look away from the histrionics and the battles going on in Washington," says Bernard Baumohl, chief global economist at the Economic Outlook Group. "They're beginning to realize that organic growth in the private economy is beginning to pick up speed."
Americans have seen this movie before. And this time, the ending doesn't scare them.
Even with today's trigger date for the cuts drawing near, Americans have been pouring money into the stock market. The Dow Jones industrial average has jumped nearly 8 percent this year and is approaching a record high.
Consumers are also growing more confident. And last month, orders for U.S. factory goods that reflect companies' investment plans surged by the most in more than a year.
Why less concern?
For one thing, the cuts are smaller than they seem: Actual spending will likely drop $44 billion in the budget year that ends Sept. 30, according to the Congressional Budget. That's only slightly more than 1 percent of federal spending.
What's more, federal agencies must give workers a month's notice before imposing furloughs, which will likely force many to take one day a week of unpaid leave indefinitely. So the pay and spending power of government workers and many contractors won't be affected until April at the earliest.
Perhaps more important, the delay gives lawmakers time to seek a deal that might retroactively reverse the spending cuts before they could do much damage to the economy.
"If it lasts a matter of a few weeks or a few months, I don't think it will have any measurable impact on growth," Baumohl says.
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