The Debt “Deal” Is A Bad Idea

For what feels like the millionth time, I am utterly disgusted by the goings on in Washington.  This, of course, is nothing new, but the stakes are much higher this time and I feel like I’m watching a slow-motion train-wreck in action.

For weeks, we’ve been warned by Congressional leaders in both parties, and by the President, himself, that August 2nd was coming and that this date, due to the ending of borrowing authority for the United States, would be tantamount to Biblical Armageddon.  The message was that something had to happen, a deal had to be reached, or the world as we know it would come to an instant and abrupt end.

Of course, we all know that this was simply political speak in their best Chicken Little impersonation, and the American people bought it, hook, line, and sinker.

Over the course of the last 24 hours, we have been lead to believe a number of things about this deal.  First, that the crisis has been averted and that tomorrow will be just like any other day before it.  Second, that there truly will be real, meaningful cuts and finally, that taxes would not be increased for anyone.

Let’s address these fallacies one by one.

Has the crises truly been averted?  We’ve been lectured over and over that now was the time to address this; that they did not want to “kick the can down the road” yet again, That, however, is exactly what they’ve done.  The can has been kicked.  The crisis hasn’t been averted, just delayed, yet again.  True, the debt ceiling has been raised enough to get the country past the all-important 2012 election, but then what?

The “deal” calls for the creation of another blue-ribbon 12 member Super Congress that will be tasked with the heavy lifting.  Certain triggers were put in place to entice both sides to play ball, but, from my reading of things, puts more pressure on the GOP than on the Democrats due to the size and scope of the Pentagon cuts that will happen if the panel fails to accomplish anything.

The second lie is in the description of the so-called cuts.  Once again, the American people are snowballed into believing that base-line cuts are, in fact, real cuts that actually mean something.  They are not.  They are simply cuts in the projected rates of increase,  For example, let’s say you have a program that is scheduled to get a 10% increase in funding next year from this year’s budget, but because of so-called fiscal responsibility, will now only get a 7% increase next year.  In Washington-speak, that’s a 3% cut in that program.  To you and me, that’s still a 7% increase in spending.  Time and time again, this accounting trick has been played on the American people.  The card was just played again.  Rest assured, that when the panel meets, more of these kinds of cuts, rather than real, substantive cuts will be proposed and hailed as the best thing since sliced bread.  That’s business as usual, and it continues unabated to this day.

Finally, the tax issue continues to rear its ugly head.  The media continues to paint this deal as a victory for the Tea Party in that revenue increases appear to be off the table.  The 800 pound gorilla in the room is the expiration of the Bush tax cuts.  Obama extended those last year, but they are set to expire again and this time, they probably will.  That, my friends, is a tax increase.  In November, when the Wonder Panel meets, it is almost certain that they will propose other revue adjustments (read tax increases for those who can afford it so that they will then pay their “fair share”).

Its almost as if Wimpy walked into Washington and promised to pay us Tuesday for the hamburger today.  Obama got his debt ceiling increase today, while we all have to wait till Tuesday for the payment.  A payment that will only come when this whole house of cards comes crashing down.  One day, perhaps sooner that we all would like to think, that is exactly what is going to happen.

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