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What do you think of the new Debt Compromise? Is it a fix or just a band-aid?
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- Recommended by:
- Mike R,
- Michael Adcock
Not much and it is a short term band-aid.
- Recommended by:
- Mike R
I'm with Bob on this. It just kicks the can down the road. With the crisis pushed out of the headlines I think the recommendations of the "Super Congress" will fail to be taken seriously until we get a new President.
- Recommended by:
- Mike R
This is a joke question, right? Congressional leaders and the administration on all levels kicked the can down the road for somebody else to worry about. There is no leadership in the House or Senate and certainly not the White House that has the courage to fix the economic problems America faces today and well into the future. This compromise legislation is just another example of smoke and mirrors being foisted on an inattentive, badly informed and politically polarized public.
I don't think the public was inattentive or badly informed on this one. I guess we'll see at the next election cycle.
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This is a massive band aid. $800 billion in cuts authorized over 10 years is only $80 billion / year. With $1.2 trillion in cuts still basically unspecified and to be negotiated by the new "Super Congress" of 6 Democrats and 6 Republicans.
The ratings agencies basically said they needed to see $4 trillion in cuts, and only $2 trillion were delivered. So the next question becomes "Does the US Credit Rating get downgraded from AAA, and if so, what does that mean ?"
While Moody's has come out and said they will maintain the US' AAA rating, Fitch is signaling that it will reduce the rating of the US in the next 30 days.
To be considered a fix, the annual Federal budget needs to go back to being a surplus rather than a deficit, and the overall debt of the US needs to get back to 50% of GDP and not near 100% of GDP. This current debt compromise came nowhere close to any of this.