Debt

The New York Times on the Debt Deal: "It does not actually reduce federal spending."

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As the debt deal took shape, Chris Edwards from the Cato Institute offered multiple reminders that despite talk of "cuts," the legislation does not actually reduce federal spending over the next decade, even if enacted exactly as planned (which is in no way guaranteed). Here's another reminder—this one from The New York Times:

There is something you should know about the deal to cut federal spending that President Obama signed into law on Tuesday: It does not actually reduce federal spending.

By the end of the 10-year deal, the federal debt would be much larger than it is today.

Indeed, both the government and its debts will continue to grow faster than the American economy, primarily because the new law does not address federal spending on health care.

That is the reason that the ratings agency Standard & Poor's and its rivals still are threatening to remove the United States from their lists of risk-free borrowers, although the other agencies, Moody's and Fitch, both said Tuesday that they would watch and wait for now.

Earlier this week, I argued that the debt deal won't save our credit rating

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  1. THIS PROVES WE NEED SINGLE PAYER!!!!!!1

    1. The NYT is a shitty, biased, left-wing–wait, they agree with us?

      The NYT is a bastion of objective reportage, a credit to print journalism!

  2. Is it paranoid to suggest that this entire ratings system is just one giant con? Suddenly Moody’s is ok with sitting by? Why because the economic outlook is so good, or because someone paid them off?

    1. Funny, how they were going to downgrade within a few months unless a $4TT deal was reached.

      And now, with a $1T, best case $2.8T deal, deal on the books, suddenly they’re cool.

      Fortunately, I don’t think the bond market (which is the biggest and smartest market in existence), probably doesn’t care much about what rating is assigned to the US government by rating agencies under its jurisdiction. Plenty of the players in that market can run reach their own conclusions.

  3. A link to the article would be nice.

  4. Can’t find the article on the NYT site.

  5. Somebody ought to send this to Margaret Bogenrief at Business Insider (she of the “Open Letter To The Democratic Party: I Hate You”). Why anybody other than a rabid TEAM RED/TEAM BLUE hack actually thinks this deal will save America/destroy America is beyond me.

    1. Well, the abject failure to do anything about the continued accumulation of debt will, at some point, lead to a potentially catastrophic “correction”. Whether this was our last chance or not is up in the air, but there’s a case that this failure makes that correction inevitable.

    2. THE TERRORISTS GOT EVERYTHING THEY WANTED*.

      *I don’t have any idea what they wanted or care to find out, but I didn’t get everything I wanted, so I assume that they must have won.

  6. the debt deal won’t save our credit rating.

    The deal will, however, *create* our credit rating.

  7. “both the government and its debts will continue to grow faster than the American economy, primarily because the new law does not address federal spending on health care.”

    Proof that the NYT can get something right–even if it is for the wrong reason. The truth is that the government and its debts will increase, but because of all the laws that DO address healthcare–medicare, medicaid, Obamacare, SCHIP, and all of the other giveaways on which the old, the poor, the young, and rest of us have been stuck with.

  8. You would think a ratings agency would just set up a metric and then let the ratings adjust automagically based upon the metric.

    Now, each of the ratings agencies might have a different formula for rating countries, and that is okay, gives a range of results and some would work out better than others.

    If all said AAA, that would be a good sign. One metric might be more leading that others and drop sooner. And investors could ignore that one or consider it more important.

    But, this might just be my crazy engineering brain speaking.

    1. Theodoric of York: Perhaps she is right. Perhaps I’ve been wrong to blindly follow the traditions and superstitions of the past centuries. Maybe we barbers should test those assumptions analytically. To experimentation and scientific method. Perhaps this scientific method could be extended to other fields of learning. Like natural sciences, art, arcitecture, navigation, perhaps I could lead the way to a new age. An age of rebirth. A Renissance.! Nah.

      1. http://books.google.com/books?…..ge&q=ellis wyatt second renaissance&f=false

        Wow, that’s a long link. Google Books should work out a new formula.

        1. Okay, that came out all messed up. Don’t bother trying to follow it.

  9. For some reason, this seemed appropriate here.

  10. You know what does save you money? Entering in promo code: ROME.
    It works on so many websites. So just try it.

  11. As always, the NYT is a day late in their analysis.

    The fact that there are no cuts has been perfectly obvious for weeks, if not months. But the geniuses at the NYT manage, once again, to point the manifest lies and shortcomings of Our Masters in DC, only after the deal is done.

    New motto: “All the news that’s too late to matter.”

    1. They’re a day late on purpose. They knew the truth all along but the truth doesn’t get them what they want so thy’re more than happy to allow the presumption of cuts highlighted on their editorial pages to go uncorrected until after the vote is over.

  12. It’s Washington at its best: any bill, no matter how crappy, is better than no bill.

    Witness the stimulus, ObamaCare, the debt ceiling bill, etc., etc., etc.

    We’re well and truly f***ed. They know it; we know it; the rest of America, though, only feels a slight sensation in the sphincter region that foreshadows the brutal rape to come.

  13. Are the democrats really that stupid to think they lost when the government is going to continue growing at an unsustainable pace? They should be over-the-moon thrilled that the “stimulus” has basically been written into the baseline. Talk about a huge victory for them! I guess it’s never enough, though.

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