Whew – that was a close one!
And to think that America was on the brink of a fiscal meltdown. Instead of capping out at $14.2 trillion in debt or limiting debt increases before serious spending cuts can be approved Congress and President Obama approved a bill that will increase the debt by an additional $10 trillion over the next 10 years. Don’t worry – if you use a fancy government calculator you will see that the bill will cut spending by $3 trillion. Impressive, I know. But if you use common sense you will realize that this debt deal will actually burden American taxpayers with $7 trillion in more debt!
Senator Rand Paul summed up this debt deal in an open letter today when he paraphrased Senator Jim DeMint:
To paraphrase Senator Jim DeMint: When you’re speeding toward the edge of a cliff, you don’t set the cruise control. You stop the car. The current deal to raise the debt ceiling doesn’t stop us from going over the fiscal cliff. At best, it slows us from going over it at 80 mph to going over it at 60 mph.
Paul went on to say:
This plan never balances. The President called for a “balanced approach.” But the American people are calling for a balanced budget.
This deal does nothing to fix the overreaches of both parties over the past few years: Obamacare, TARP, trillion-dollar wars, runaway entitlement spending. They are all cemented into place with this deal, and their legacy will be trillions of dollars in new debt.
But hey – at least taxes will not go up. Or umm…maybe they will. From RCP:
“We’ve had too much talk the last few days of Republicans as early as this morning, Republican leaders in the Senate saying there will be no revenue. That’s not going to happen. Otherwise, the trigger is going to kick in. The only way we can arrive at a fair arrangement for the American people with this joint committee is to have equal sharing. It’s going to be painful. Each party if they do the right thing, it’s going to be painful for them because to be fair, we have to move forward. There has to be equal spending cuts, there has to be some revenue that matches that,” Sen. Harry Reid (D-NV) said on the floor of the Senate right before voting started on the debt deal.
Increased revenue from taxes was not included in the debt compromise.
Ok well maybe taxes will go up, but this bill stabilized the economy. Not so, says Moody’s:
Moody’s Investors Service said the U.S. credit rating may be downgraded for the first time on concern that fiscal discipline may erode, further debt reduction measures won’t be adopted and the economy may weaken…
The debt-limit compromise “is a positive step toward reducing the future path of the deficit and the debt levels,” Hess, senior credit officer at Moody’s in New York, said in a telephone interview. “We do think more needs to be done to ensure a reduction in the debt to GDP ratio, for example, going forward.”
Oh and on that note did you see the stock market today?
A sell-off is erasing all of the year’s gains in the stock market.
The Standard & Poor’s 500 lost 2.6 percent Tuesday as investors grew increasingly concerned about the economy. The benchmark index is now at its lowest point of the year.
A report that consumers cut their spending in June for the first time in two years added to a series of weak economic indicators have pushed stocks lower for seven straight days.
The S&P is closing down 33 points to 1,254. The Dow Jones industrial average is down 266, or 2.2 percent, to 11,867. The Nasdaq is down 75, or 2.8 percent, to 2,669.
Cheer up – Obama has 536 more days in office to fix things. Grab your wallets!