If anyone thinks that this deal fixes anything, they need to think again.
At best, in ten years, Congress plans on increasing the debt by $7 trillion instead of $10 trillion. The ‘baseline budgeting’ scam employed by our lawmakers has got to be scrapped. That’s nothing but fantasy economics. Time to get down to the same ‘real economics’ that exists in the real world outside Washington D.C..
That bill and the PR surrounding it is another way to kick the can down the road while making it look like something good was accomplished. It is unlikely to prevent a downgrade in the credit rating, which was what all the crisis-talk was about. The only good that came out of it is that at the very least, the conversation has shifted from expanding government to reducing it.
But this bill does nothing to reduce it. Because of that, the credit rating is still going to suffer. And the so-called cuts don’t even start until after the election in 2013.
Sen. Lindsey Graham (R-SC) characterized it this way, ‘instead of running to bankruptcy, we’re walking to it.’
If the bill called for spending to be held at last year’s level, with no automatic annual increases as exist in this bill, then that would be worth signing into law.
To illustrate how ridiculous the smoke and mirrors on the budget gets under baseline budgeting, if this bill called for a spending freeze, that is to say with no increase whatsoever, the CBO would rate that as a 9 trillion-dollar cut. And that makes sense to who? Apparently it makes sense to too many people on capital hill.
UPDATE 8/6/2011: U.S. Loses AAA Credit Rating From S&P