Even if the Super Committee does manage to find $1.2 trillion in cuts to increased spending over ten years, I’d imagine there will still be dire consequences, seeing that the national debt is now over $15 trillion and rising every moment. But, since that’s all they’re tasked with, that’s what everyone is focused on. It’s so pathetic, they can’t even come up with what amounts to little more than a rounding error over ten years.
Failure to reach an agreement on what is essentially a small reduction on the deficit – just 0.7% of gross domestic product in 2013 – could trigger another rating’s agency downgrade, warned economists including Paul Ashworth, chief North American economist at Capital Economics.
“With all this pressure to reach an agreement, it really doesn’t look good if they can’t find a solution,” said Ashworth.
He said that the US had much more serious problems that would need tackling first.
“The US is already spending 7% of GDP on Medicare and Medicaid [the government-run health schemes] and that will be up to 10-11% in the next two decades. Debt is on an unsustainable path, and if they can’t reach an agreement on this, it doesn’t look good for the future.”
Ratings agency Standard & Poor’s cited the “extremely difficult” political conditions in Washington when it made the controversial decision to downgrade its rating on US debt in August. The firm also put the US “on watch’ implying further cuts could come.
Morgan Stanley analyst Christine Tan predicted earlier this month that there was now a one-in-three possibility of another downgrade. (Read More)
So, you probably are thinking that Capitol Hill is just abuzz with activity considering the deadline is only days away. Unfortunately, you’d be wrong.
Following days of dire predictions about the fate of the so-called Super Committee tasked with finding at least $1.2 trillion in savings, the ghost-town scene on Capitol Hill Saturday was not encouraging.
The only member of the so-called Super Committee spotted was Sen. Jon Kyl, R-Ariz., who told reporters that no in-person meetings were planned — only phone calls.
t was not the typical picture of lawmakers burning the midnight oil in pursuit of a carefully crafted, last-minute deal, the kind Washington is famous for. Instead, reporters, construction workers and tourists made up the bulk of the occupants at the Capitol, with lawmakers home for Thanksgiving break. Escalators in the office buildings were offline, the interior illuminated by the occasional triggering of motion-sensor lights.
Lawmakers held out hope they could produce something, but skepticism was setting in as the window for action narrowed. (Read More)
Boy, they sure do get a lot of time off, don’t they?