Super Committee Failure in 8 Steps
Stephen Green explains how Washington cuts the deficit in a mere eight steps.
Stephen Green explains how Washington cuts the deficit in a mere eight steps. Where we’re at now:
5. The SuperCommittee fails.
6. Axe the automatic spending cuts.
7. Business as usual!
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But, really, hoocoodanode?
This is one area I’m grateful for political incompetence in the federal government.
I’m not sure how you measure Failure…
The sequestration will cut $1.2T…the Bush Tax Cuts expiring as originally intended/designed will raise $4.8T in revenue…and savings to the debt service $900B. That’s round ’bout $7T in long-term debt reduction….on top of the $1T from the Debt Ceiling debacle.
Maybe that word…Failure…doesn’t mean what you think it means.
Sure…Republicans are already talking about reducing the cuts to Defense…but they are fiscal frauds…so that’s to be expected. Still $7-8T in debt reduction is hardly failure.
I’m beginning to think the sequestration will never happen.
@Hey Norm: If the cuts actually happen, they’e a success for sequestration. But, insomuch as bludgeon automatic cuts were supposed to incent the supercommittee to make thoughtful ones and even consider revenue enhancements, they’re a colossal failure.
@ James…
No question.
However I do think that the Administration is smart enough, especially based on the history involved, to know the Super-Commitee was never going to work. Hence Obama’s distance from the process.
In any case, whether it was 3-D chess or just dumb luck, they now have a $7T bludgeon to use for the next 11 months.
Yes – the cuts could be more thoughtful…and I certainly don’t want to see the Bush tax Cuts that affect the middle class expire…but given the level of obstruction…perfect is the enemy of good.
@Hey Norm: Or we could stop worrying about the non-existent debt crisis.
The long term debt, which this is about, is a problem.
The short term is not. In the short term demand and jobs are the problems that need addressing.
@Hey Norm: The long term debt is not a problem because the government’s debt isn’t really debt. When someone wants to buy Treasuries, the buyer’s bank disburses reserves to the government’s account at the Fed. When the debt matures the reserves are sent back to the buyer’s bank. The bonds being issued do not fund government spending and the money doesn’t go anywhere. All that’s happening is the Fed is draining excess bank reserves to hit it’s target interest rate. There is no debt crisis because in reality there is no debt.