So the USA has a deal on debt. In exchange for increasing the federal borrowing limit cuts of maybe $2 trillion in spending have been agreed, and it seems likely that the vast majority of these cuts will be borne by those least able to suffer the burden amongst the American poor.
This is as a result a day when all who campaign against injustice should rightly be angry.
And let’s remember this deal is not a solution to a real problem: this deal is a solution to a crisis deliberately created by far right politicians in the USA who were determined to increase the wealth of the wealthiest Americans at cost to the vast majority of the rest of the population of that country. It looks very likely that they have achieved their goal. It’s hard to celebrate a victory that will bring increased unemployment, an economic downturn, mass hardship and even a return to destitution for many Americans when that outcome has been deliberately planned and imposed by the country’s own politicians.
But there’s something even worse than that at the core of this deal which would be all too easy to ignore. The fact is that this deal is not going to solve the US debt crisis. By putting millions out of work, as I’m sure it will, US tax revenues will decline. Its fiscal position will deteriorate.
Could we have a little proportion here please?
Obama said the agreement will cut about $1 trillion over 10 years and cuts would not happen so quickly that they would drag on the fragile U.S. economy. Another $1.2 trillion would be cut if a joint committee fails to find at least that much in budget savings.
The deal cuts, at maximum, $100 billion a year from spending.This deal and the next deal together might cut $250 billion a year.
Total federal spending is around the $3.8, $3.9, trillion mark.
So we\’re talking about cuts in future budgets of 2.6% to, at maximum, 6.5%, over a decade.
You\’ve got to believe in a really high multiplier for that to cause serious problems you know.