Here is a summary of a macroeconomic model’s prediction of March 1 sequester effects (from Macroeconomic Advisers LLC):
In one of the posts I made in the review discussion I wrote a bit about sequestration (the current version, scheduled for Jan. 2), which originates in the Budget Control Act of 2011 (which in turn reactivates GRH I (1985) in some portions). The potential for real consequences of the type envisioned in GRH I and II has never been as likely at such a scale. As soon as the elections are over, you can anticipate hearing a lot more in the news about last-ditch efforts to address this looming deadline and other tax/spending deadlines that happen to overlap with it. I would say you were fortunate to be taking this class in such interesting budgetary times, if we didn’t also have to live through them.
Here are some more backgrounders/perspectives on upcoming budgetary and fiscal policy issues:
More general: Brookings Institution – The “Fiscal Cliff” issue – includes not only the sequester deadline but also other tax and spending policies of various partisan origins which have critical dates at the end of this year (AMT tinkering deadline; Bush tax cut expiration; Affordable Care Act coming into play; expiration of payroll tax cuts) – all coming on top of a weak economy barely recovering from the Great Recession: http://www.brookings.edu/research/opinions/2012/09/26-fiscal-cliff-frenzel
Specific to sequester: