Summer Theater in Washington
Stepping back from the details of the debt limit deal just reached, I think this was a productive summer in Washington. In July in most years, nothing gets done in Washington. This July, there was some progress made to restrain the growth of the federal debt. Normally, as a nation, we are preoccupied with something utterly inconsequential during the summer. At least over the last month, our elected representatives were finding ways to negotiate with each other and reach an agreement on something of consequence.
Did we do ourselves proud with this extended soap opera? No, the need to use the debt ceiling as the forcing event and the juvenile way that the negotiations sometimes played out certainly didn't elevate our standing in the world. But I'd rather have the deal than the standing at this point. And there really was little concern that the federal government would default on its explicit debt.
Is this a great deal on the budget? No. It is worse than several of the intermediate proposals offered during the negotiations. (I would have taken this offer and run with it.) It is worse than the Simpson-Bowles recommendations. But it is something, and it may even be a start. When the Congress returns from its summer recess, we will still have a long-term budget problem, and the Congress will still be responsible for solving it.
..."our elected
..."our elected representatives were finding ways to negotiate with each other and reach an agreement on something of consequence."
You sir are daft.
Unsubscribed.
Less Cuts for War
The deal reduced the small cut to growth in arms waste from $400B to 350B over a ten year budget of $6,500B.
The other $1.5T could easily come from the military industry congresscartel, if it weren't for the PAC's.
ANd the generals' whining.
The only positive thing that
The only positive thing that can be said about this deal is it's less awful than default.
I have to congratulate the DC
I have to congratulate the DC establishment for, once again, winning at the expense of the American people. And I think it was a great deal on the budget -- for DC. $30 billion or so in actual spending cuts (I'm sure most agencies can find that amount in their wastefraudabuse fund) in exchange for a certainty of $2+ trillion in increased free spending? All while successfully demonizing everyone outside govt who disagrees as a "terrorist" - and every freshman critter deluded enough to believe that their constituents wishes are more important than the DC powers-that-be as a "tyrant"? And the DC establishment even gets a photo opp proudly wearing the hairshirt of fiscal responsibility?
And for all the bazillions in "future spending cuts" by eliminating Santa's wish lists, I remain confident that DC is creative enough to add it all back and more by the time DC runs into the next debt ceiling cap. So that once again DC can agree to come up with beaucoup de "spending cuts" next time too.
I only hope that the credit raters see through the charade and downgrade the US to junk status. Not that that will matter in a world where every sovereign is in a race to destroy money itself.
The biggest mistake
is to to think doing "something" is better than nothing. The first rule is not to make the situation worse. This makes the situation worse, not just economically, but politically (in terms of institutions). This was a "negotiation" mostly among a small group of legislators that excluded large parts of our elected representatives with a lot of public posturing by others. This is not an exercise in maturity and despite your caveats, the first paragraph is just insane.
Six Months?
Am I missing something or is the gist of this deal a very loud signal to the smart money that it has six months to get out of the dollar and out of the United States?
Believe me, the search for some kind of alternative safe haven does not end merely because this charade has ended. That alternative will probably be a strategy rather than an asset class, because nobody wants to take the huge career risk of betting against the United States. But after everybody gets back from their holidays Job. No. 1 will be to find it.