And compare that $44 billion 2013 spending cut (most of which is slower baseline growth, not a cut in spending levels) to a roughly $150 billion 2013 tax hike. Hmm, let me get this right: It's okay to raise taxes, because that won't hurt the economy, but it's not okay to cut spending, because that will lower output?
Doesn't make any common sense.
Let's not forget that in recent years, there isn't a U.S. business large or small that hasn't had to undergo major belt-tightening. But where's the federal-government belt-tightening? Federal civilian employment has increased substantially during this period. And while the business sector has survived to become highly profitable, the federal sector has become bloated, edging ever closer to debt bankruptcy.
(Read More: Sequestration Is Not Favored Method to Cut US Deficit: NABE)
Oh, regarding Team Obama's doom-and-gloom economic forecast, hearken back to 2009 when the White House economic gurus predicted 3 to 4 percent real economic growth in recovery, with unemployment dropping below 6 percent. That, presumably, would have been driven by a roughly $1 trillion spending increase. But instead we got the weakest recovery in modern times going back to 1947—an anemic 2 percent economy and unemployment just a shade below 8 percent. The trillion-dollar stimulus never panned out.
If Keynesian spending was going to work, it would have already worked.
So maybe we should try something new. Let's lower spending and free up resources for the innovative private sector, and then let's see if the results are better. I'm betting, as did deceased Nobel-prize winners Milton Friedman, Friedrich Hayek, and James Buchanan, that as the government sector shrinks, private economic growth expands.
It's not as though the sequester abolishes public spending. Investor's Business Daily points out that transportation, education, housing, community development, natural resources, farm subsidies, and general government have all increased by 25 to 40 percent in recent years. Therefore, you could say sequester is nothing more than a return to normalcy.
(Read More: Obama: Government Will Manage Sequester 'the Best We Can')
And let's not forget that while budget authority declines by $85 billion for one year, Ben Bernanke's Fed is pouring $85 billion a month of new money creation (over $1 trillion a year) into the economy. Let's also not forget that the stock market has been going up, not down.
JPMorgan economist Jim Glassman reminds us that a revived housing sector, the energy boom, a rebound in business investment, and a renewal of manufacturing activity all will bolster the economy in the period ahead. Monetary conditions, he said, "remain highly stimulative." (Hat tip: Jim Pethokoukis).
No, I'm not making the case that the spending-cut sequester is going to immediately launch an economic boom. But I do believe it will help economic recovery over time. (Congress could help, too, by passing pro-growth corporate tax reform that lowers marginal rates and eliminates cronyist tax loopholes for both large and small businesses. That would be a real economic booster shot.)
So the Republicans are right to stick to their guns on budget cuts. And if President Obama expects to point his finger at the GOP for an economic-sequester catastrophe, he's going to be mistaken.
—By CNBC's Larry Kudlow; Follow him on Twitter