World economy to bear burden of Obama's sequester. (VIDEO)

Austerity has hit the United States as President Barack Obama signed into law a directive ushering in significant cuts to federal agencies' budgets and triggering the sequester that has been debated in Washington during the last several weeks. Automatic cuts will slash Washington's military and domestic spending by 85 billion dollars in 2013.

RT's Gayane Chichakyan takes a look at why this could prove a headache in the US and beyond.