The Debt Deal's Failure

The Debt Deal's Failure: "In narrow economic terms, the debt deal is actually not a big deal, neither as good as its advocates claim nor as terrifying as its opponents fear. The actual cut to the 2012 budget, the only budget over which this Congress has control, is $21 billion out of total expenditures of $3.7 trillion—a pittance. Everything else can and will be changed by future Congresses. What the deal does is kick tough choices down the road, this time to a congressional super­commission that will have to come up with a larger plan to reduce debt. And it does nothing to spur growth, without which the debt will expand well above projections. That’s why the usually circumspect Mohamed El- Erian, head of Pimco, the world’s largest bond fund, grades the deal somewhere between an incomplete and a fail. “Other than eliminating default risk emanating from a self-manufactured crisis,” he writes, “there is nothing good about America’s debt ceiling debacle.”..."