8/02/2011

Newest Fox News piece: The Debt Deal's Three Biggest Winners and Losers

My newest piece starts this way:

With a debt ceiling agreement finally in place and the Senate on track to approve it today congratulations are being handed out all around. 
Armageddon and catastrophe has supposedly been averted. And politicians are rushing to put the best face on the deal. 

Unfortunately, the new agreement does not accomplish as much as many had hoped, or as much as it should have, in terms of curbing spending and continued deficits. This explains why stock markets continued to fall despite the supposedly "good" news. The reason is because, once again, politicians are continuing to push the problem to the future. 

Here's a look at the winners and losers in the aftermath of the "catastrophe" that's just been averted: 

The Winners:

1. Stimulus Recipients and Big Government: President Obama’s “Stimulus” was supposed to just be temporary. Alas, the debt agreement locks in big government and the extra spending President Obama initiated will continue. 

After government spending soared by 28 percent from 2008 to 2011, the debt deal only starts cutting a meager $22 billion next year. That is an incredibly trivial cut -- just 0.6% of expenditures planned for next year. The cuts agreed on are heavily back-loaded towards the end of the 10 year budgeting cycle, when President Obama and many members of Congress will be out of office. 

Short of a constitutional amendment mandating balanced budgets, . . .


UPDATE: So what happened to the market today? They fell in Asia, Europe, and the US:

The Dow Jones Industrial Average plunged 265.87 points, or 2.19 percent, to end below the psychologically-important 12,000 mark at 11,866.62. The last time the blue-chip index declined for eight-consecutive days was in October 2008.

The S&P 500 plummeted 32.89 points, or 2.56 percent, to close at 1,254.05, slipping into negative territory for the year.

The tech-heavy Nasdaq tumbled 75.37 points, or 2.75 percent, to finish at 2,669.24. The S&P 500 and Nasdaq are both below their 200-day moving averages. . . .



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1 Comments:

Blogger dWj said...

It should also be noted that the calculation that the "debt will rise from $14.3 trillion to "only" $22.2 trillion rather than to $24.6 trillion" is based on calculations assuming that taxes in 2013 are going back up to the levels they were at at the end of the Clinton administration. The leviathan will get by on only $800 billion per year of borrowing by raising taxes, not by only spending that much more than current tax rates bring in.

8/02/2011 7:15 PM  

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