United States National Debt Ceiling Deal

America is still in a lot of trouble. The emerging outlines of a deal to cut spending by at least $2.4 trillion over 10 years, with a multibillion-dollar down payment this year, could damage the economy even more and complete a reversal in the federal government's role from massive spending in the immediate aftermath of the recession to massive spending cuts in the years ahead. "Unemployment will be higher than it would have been otherwise. Growth will be lower than it would be otherwise. And economic inequality will be worse than it would be otherwise," said the chief executive of the bond firm Pimco. "We have a very weak economy, so withdrawing more spending at this stage will make it even weaker." A June analysis by the Congressional Budget Office has concluded that keeping the U.S.'s ratio of debt to gross domestic product at current levels until the year 2085 (to avoid scaring off investors) would require spending cuts, tax hikes or a combination of both equal to at least 8.3 percent of GDP each year for the next 75 years, vs. the most likely (i.e. "alternative") scenario. That translates to some $15 trillion over the next decade. More than three times what Obama and Boehner were considering. In other words, the federal government is still just "kicking the can down the road." This will not really make the national debt better and could easily make it worse. Again, what kind of world are we leaving to the future generations?

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