The real story....

There has been much fuss made over the "draconian" cuts that have just come into effect with the sequester. Of course every agency who was going to be effected has been spending the last month painting the worst possible picture of the consequences. And the press has slavishly reported all these "the sky is falling" stories without any critical examination at all. Never mind that the cut, in dollars, is about the same as government spending has expended during this administration, so that in fact the cut just takes us back more or less to the spending levels in place when President Obama took office.

Here is how total government spending looks for the years of the Obama administration, WITHOUT the sequester in 2013:
2009: $3.27 trillion
2010: $3.46 trillion
2011: $3.60 trillion
2012: $3.65 trillion
2013: $3.72 trillion

Nonetheless, it is a dumb way to make these cuts, primarily because the things that are the real long-term problem - Medicare and Medicaid - were exempted from the cuts. Instead we cut things that directly impact our future economic growth and competitiveness - things like basic research, education support and job retraining.

To see the real problem, look at the chart below, (from http://www.usfederalbudget.us/) built from the government's own figures, which shows how entitlement spending takes over in the coming decades.
 

The core things which both parties seem to have forgotten, but especially the Democrats, are

1) EVERYTHING rests on the strength of the economy. The only place to get the revenue to support all the nice things that everyone, Republican and Democrat alike, would like the government to pay for is from the economy. Poor economy = low tax revenue = no money for government programs. And all the populist ideas which the Democrats have been peddling - higher taxes, more regulations, higher minimum wages, required health care for employees, etc, etc - simply add to the cost of doing business and reduce the competitiveness of American companies in the world market.

2) The real long term problems are in the entitlements, especially health care. Until someone deals with those issues, politically explosive as they are, nothing else we do will make much difference in the long run.