After much mud-wrestling, Washington hatched a deal. The House bought the scheme on Monday; it cleared the Senate and President Obama signed it yesterday. Spending gets cut by a reported $917 billion (over ten years), while the debt ceiling goes up by a like amount (immediately).
A "super-committee" will decide by Thanksgiving what else to cut, to the tune of $1.5 trillion (over ten years), and if Congress doesn't salute by Christmas, that'll trigger mandatory cuts across the board (minus sacred cows). Either way, the debt ceiling will get bumped up by (you guessed it) another $1.5 trillion (immediately).
It doesn't take an economist to see that a deal isn't the same thing as a solution. By averting default now, our elected officials embraced the certainty of our nation's complete economic collapse.
Think about it -- the U.S. government borrows 41 cents of every dollar that it spends, and it just got the ok to borrow even more.
Let's look at a few facts. The national debt is over $14.3 trillion and climbing every second. The interest alone is approaching half-a-trillion dollars a year.
Each American household's share of the debt exceeds $125,000. Every American child born today begins life with a debt of $46,000.
Last year, the ratio of the national debt to our gross domestic product was a disturbing 93%. Because the U.S. economy is contracting (projected to fall behind China within five years) and the debt is certain to grow, this year our government will owe more than our nation produces.
And Washington acts as if it can sustain this madness.
Tea Party-backed Republicans, in a fit of redemption, pressed for passage of a Cut, Cap and Balance Act -- the right idea, in my opinion -- but such a sensible approach was bound to die in the Senate. Now, for some reason, the GOP seems buoyed by cutting a deal that's all cuts and no revenue, boasting that they "changed the conversation."
That's unfiltered bullshit, of course -- there's nothing to celebrate. A moral victory, even if there was one, won't get the job done.
I fear for my country.
