Economics Daily Digest: A fiscal distraction

By Tim Price, originally published on Next New Deal

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Sequestering common sense (WaPo)

Katrina vanden Heuvel writes that with the sequester looming, all eyes in Washington are on the manufactured budget disaster, which saves deficit hawks the trouble of shouting "Hey, look over there!" when confronted with real problems like mass unemployment.

12 Ways the Sequester Will Screw the Poor (MoJo)

Like peasants sent to the front lines so the noble knights wouldn't need to get their armor dirty, the poor are fated to absorb the brunt of the pain from spending cuts. Erika Eichelberger writes that everything from public housing to special ed is on the line this time.

Austerity Kills Government Jobs as Cuts to Budgets Loom (NYT)

Binyamin Appelbaum notes that the sequester will bring even deeper cuts to a federal government that's already shrinking faster than it has since the end of the Cold War. Forget about drowning it in a bath tub; it might just wind up disappearing down the drain.

Beyond the Sequester Panic (Washington Monthly)

Ed Kilgore writes that if any good comes from the current budget debacle, it might finally help more voters realize that the phrase "government spending" describes things they care about and isn't just their cue to boo and hiss during Republican stump speeches.

Mismeasurement of Federal Spending, Investment and Saving (NYT)

Bruce Bartlett argues that our deficit debate is distorted by the notion that there's no difference between short-term consumption and investing in the future, which suggests the only true measure of responsibility is paying for everything in cash like a drug dealer.

Dependents of the State (NYT)

Amia Srinivasan notes that the worst thing anyone can do according to modern political rhetoric is depend on the state, so it's odd that we don't demand that the rich forsake government support and go back to carting all their stuff around in a wheelbarrow.

U.S. banks in 2012 post highest profits since '06 (Reuters)

Emily Stephenson reports that new data released by the FDIC shows 2012 was a very good year for finance, but they're worried about the effects of an economic slowdown caused by the sequester. What about the banks? Won't someone think of the banks?

Senator Warren: Why Isn't Wall Street Paying Back Taxpayers For Being 'Too Big To Fail'? (Think Progress)

Ben Bernanke faced some tough questions from Elizabeth Warren yesterday about the subsidy big banks receive due to expectations that they'll be bailed out, but he displayed wisdom uncommon among his peers by agreeing with her that it's pretty messed up.

Tim Price is Deputy Editor of Next New Deal. Follow him on Twitter @txprice.