Jeffrey Miron argues that we should use cost-benefit analysis to evaluate government expenditure:
…even if transfers help stimulate consumer spending, their net effect on the economy is unclear. This implies that whether the sequester will harm or help the economy depends on whether cost-benefit considerations can justify the existing level of government expenditure. And on this question, the answer is clear. Across all categories, federal expenditure is far greater than necessary to achieve the legitimate goals of government intervention.
Read more at The Sequester Will Be Good for the Economy | Cato Institute.
The Grand Sequester (Bargain) is interesting for approximating what old timers will recall as “zero based budgeting”, i.e. forcing every budget area to justify it’s allocation. Of course, nobody every really did it from the zero bound. But across the board cuts will create a basis for incremental bipartisan micro-deals, forcing budget areas to justify failures to make do, and letting Congress and the administration trade off small incremental spending / revenue increases over the lifespan of the Grand Sequester. GOP will trade Defence programs for social programs or taxes as the affected wheels squeak loud enough. When the Grand Sequester begins to bite, the dealmaking begin, too.