OK, Let Us Review: Who Won the Debt Ceiling Fight?

Now that the party is over, it is time to clean up the mess and see what lies in the future. There is no definitive answer to my question, but the real loser seems to be our children and grandchildren. Not only have we mortgaged their inheritance, we will pass on to them ginormous credit card bills that will force them to declare bankruptcy.

TEA PARTY LOST

You might think that the nasty anti-Tea-Party rhetoric in the liberal media to be a sign that they won, and more so from statements that they have genuinely shifted the debate.

Hogwash.

True, there are no tax increases, but there are also no real cuts in the current fiscal budget.

OBAMA WON

He is being pilloried by the Left because he did not get a tax increase, and therefore conclude that Mr. O lost the battle. Not so. Mainly, he got such a huge debt ceiling increase, that this issue will not come up again until AFTER the 2012 elections. This is a victory of major proportions. The power the Tea Party had has been spent, and Mr. O will not have to cut a single thing: not Medicaid, not Medicare, not Social Security, nothing. If fact, the only sure cuts are Defense. The budget deficit will be $1+ trillion as far as the Excel spreadsheet can see.

AIN’T GONNA BE NO SPENDING CUTS

The true cuts to the current year fiscal budget is teeny-tiny and pretty much a rounding error in a $3.5 trillion budget. Current year legislation cannot obligate future Legislatures to spending cuts, and the Dems and Mr. O are fully cognizant of this.

BOEHNER AND McCONNELL SURRENDER

They could have exacted their pound of flesh: they would have had the hearty support of the entire Republican party. They chose not to, because they truly do not wish to reduce Federal spending, power, or influence.

TAXES WILL GO UP

The 600# canary in the room is the expiration of the Bush Jr. tax cuts. The agreement blithely ignores this, because the plan of everyone (including Mr. B and Mr. C) is to let it expire and increase taxes.

WHERE ARE THE CUTS TO MEDICAID AND SSI?

I examined the final legislation. If the mystical-magical budget-cutting-commission does not come up with cuts that pass Congress and get signed by the Prez, automatic cuts appear: $1.0 trillion over 9 years. Problem: 52% comes from DOD, and 48% from everything else, excluding Social Security and Medicaid. Interestingly, Medicare CAN be cut. Why? Because they went back to the old Gramm-Rudman-Hollings bill from 1985 for the language of budget cuts.

A COMMISSION? REALLY?

Well, we tried that before: ever heard of Simpson-Bowles? Hmm?

LET IT BLOW UP, WHO CARES?

Well, really: rather than reach for a deal, they should just let the Federal Gov’t go bankrupt. Stop the SSI checks and military pay; so what? It will all the chaos would have been on Mr. O’s head.