Recently, we published a story about the demise of Carville National Leather Corp., a leather tannery in operation in the city of Johnstown since 1967. In the story, company President Bob Carville explained 65 percent of his company's business came from military contracts that abruptly dried up when Congress and President Obama failed to reach a debt-reduction agreement in March, which triggered automatic across-the-board spending cuts, a process known as "sequestration." Altogether, the spending cuts have taken about $85.4 billion out of the economy.
Carville described sequestration as the "straw that broke the camel's back" and put him out of business, leaving about a dozen people unemployed.
Sequestration wasn't the only factor in the company's demise. The business caught fire three times since 2009, one of which interrupted business for eight months. In addition, relying on one client, in this case the U.S. military, can be a mistake in industry.
The loss of Carville is unfortunate for the people who lost their jobs, the vacant industrial building Carville leaves behind on Knox Avenue, and the local economy, which will be affected by the newly unemployed and the possible loss of tax revenues.
Sequestration was not a targeted approach to reducing the nation's debt while maintaining economic growth; it was a ham-fisted approach no one really wanted and one that represents the failure of our nation's leaders to compromise. Carville is only one visible manifestation of the consequences of that failure. Lexington Center, for example, Fulton County's largest private employer, relies on federal spending, which is more important to the local economy than many people realize.
The current budget battle in Washington, which threatens to shut down at least portions of the federal government after Oct. 1 and could lead to the first default of U.S. debt, has the potential to do serious economic harm to the area.
While one can lament our economy has grown too dependent on debt-fueled government spending, a realistic, measured approach to reducing that dependency is a better course than an abrupt government shutdown.
The economy is too weak for that kind of medicine. Let's not have to learn that the hard way. We call on our local congressmen to find a way to avert a shutdown and find a reasonable compromise with the president. We suggest our readers use the phone numbers on this page to call their representatives and tell them you want compromise, not brinksmanship. Members of Congress should take those phone calls seriously.