Free Markets, Free People

Daily Archives: July 31, 2011

Observations: The QandO Podcast for 31 Jul 11

In this podcast, Bruce, Michael, and Dale discuss concerns about Turkey, and the debt limit.

The direct link to the podcast can be found here.

Observations

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Tentative deal?

ABC is reporting there may have been agreement reached between Congressional Republicans and Democrats

Here, according to Democratic and Republican sources, are the key elements:

  • A debt ceiling increase of up to $2.1 to $2.4 trillion (depending on the size of the spending cuts agreed to in the final deal).
  • They have now agreed to spending cuts of roughly $1.2 trillion over 10 years.
  • The formation of a special Congressional committee to recommend further deficit reduction of up to $1.6 trillion (whatever it takes to add up to the total of the debt ceiling increase).  This deficit reduction could take the form of spending cuts, tax increases or both.
  • The special committee must make recommendations by late November (before Congress’ Thanksgiving recess).
  • If Congress does not approve those cuts by December 23, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare. This "trigger" is designed to force action on the deficit reduction committee’s recommendations by making the alternative painful to both Democrats and Republicans.
  • A vote, in both the House and Senate, on a balanced budget amendment.

Of course we’ve seen deals much like this before.  Committees never seem to get around to the promised business and triggers never seem to get pulled and, as anyone would tell you now, the balanced budget amendment will never pass.  Meanwhile, Obama  is authorized to spend another 2 plus trillion we don’t have.

Madness.   Smoke, mirrors and madness.

~McQ

Twitter: @McQandO