I guess even CNBC is economically retarded these days. Why would the private sector be worried about government spending cuts? They should be celebrating it. Relatively few private sector concerns depend on government largesse to survive. The ones that do, usually do not survive (see Solyndra etc)
The MSM ploy of trying to equate it with tax hikes is very disingenuous.
Without getting into the propriety or desirability of spending cuts; Every dollar of government domestic spending does in point of fact contribute to GDP. Thus, its loss would indeed reduce GDP. This is directly from the math formula used to calculate GDP. I make no argument that we should not reduce gov spending, we should. This is the medicine that an overindebted economy must make if it cannot grow out of its debt. Depending upon how one calculates it, government spending (of which over 40% is borrowed) is and has been responsible for between 7 and 10% of our current GDP for quite a few years.
Now whatever the effect of this might be, it’s bound to influence the level of the stock market. I’ll be the first to admit that the market believes Congress will somehow work around the sequester and yes, will probably sky on news that “the sequester has been avoided”. You and I both know this is nothing more than kicking the can down the road episode XXXVI.