President Obama announces that an eleventh-hour debt deal has been reached

"Sixty five percent approve of deal’s spending cuts. But it gets worse. Of the 30 percent who disapprove, 13 percent think the cuts haven’t gotten far enough, and only 15 percent think the cuts go too far. One sixth of Americans agree with the liberal argument about the deal."

http://www.washingtonpost.com/blogs...er-government/2011/03/03/gIQAnVtupI_blog.html

 

and then there's this:

So people want spending cuts, except for the specific programs on which spending is done, which they don't want cut at all. Not unlike the phenomenon with Health care reform - where the program as a whole is unpopular, but most of the facets of it (changing the age limit for dependents, no preexisting conditions, etc) are very popular.

They're, of course, unanimously for cuts in direct foreign assistance, which is some fraction of 1% of expenditures. This isn't really a new phenomenon, of course. People love the idea of "spending cuts" as long as it's not spending on them. That will always be popular along with "low taxes" - but frankly that's a 2 year old's way of looking at the world.

 

Because this was not a bill just to raise the debt ceiling. It was a bill to discuss our fiscal policy for the next 10 years. It wasn't about raising the debt ceiling, it was about raising it on a condition of addressing debt.

To reduce debt, you have to take into account spending, revenue, and the impact on a fragile economy. All three of those things belong in the discussion.

To say that you can arbitrarily just remove one is crazy. Because they all inter-relate. Cut spending so severly to reduce the deficit and tank the economy, and you tank revenue and potentially make the deficit worse. It's not some simple lever you pull and magically it works.

Our economy is complex. And gov't spending is a huge component of that. You have economics saying we need stimulus, and you have rating agencies saying we need cuts.

It definitely means proceed with caution and discuss all of these things, not just saying, hey this is a debt ceiling discussion why we talk about anything else?

and if that was the case, why are we talking spending cuts and tying that to the debt ceiling in the first place? why not tie the economy in as well?

 

The Republicans in this instance are being hypocritical, cutting the defense budget would show they really care.

Medicare is more important than extra Aircraft carriers.

DD

 

Medicare and S.S. aren't sustainable. They will consume 60% of the budget if they are not reformed and turn us into one giant nursing home.

I agree about defense but we also have to keep in mind that a strong armed forces is a key strategic piece to American power.

The trick is finding that right balance. I think at the end of the day, we need more competition in insurance to keep premiums lower and help doctors get better compensated. I also think that doctors need to be educated on cost-effective treatments and there needs to be some push to consider cost when addressing health care.

I know it's hard pill to swallow. But it's reality. The system can't go on like this.

One way or another, S.S. and Medicare have to be brought into check.

 

Except that SS hasn't added one cent to the deficit, and won't for over a decade. If they did absolutely nothing to SS at all the Millennials would still get 80% of their SS checks. So that problem isn't really that big or shouldn't be that hard to fix.

Medicare expenses have already been cut thanks to Oabama's health care plan, but fixing it is important in order to sustain it.

 

hmmm, parts of ObamaCare subject to cuts if the joint committee fails to find $1.5T?

 

Some more realistic data regarding the so-called "cuts" to DoD:

And the even more ever-present reality:

I like how the media shapes this as "the pentagon is worried", or these "cuts to the pentagon" when in reality the major players are huge defense contractors that rely on tax money to exist. Yay free market!

 

The markets are crashing today because investors feel the spending cuts will result in the fragile economy falling into a double dip recession. DOW down over 300 points.

That's why the bill had to consider those items. Because you now see the repercussions of what happens when you don't address them.

 

Or because cutting government spending during high levels of unemployment would really stimulate the economy and promote job growth...

Political talking points from the right have really dumbed down America.

 

This is like basso saying the markets hated Obama because they went down for a few weeks after he was elected. It's the epitome of stupid analysis.

1. Europe is collapsing - that's the driving force behind these markets.
2. Adding to that, the US is showing more and more signs of a recession - especially data from earlier this week.
3. The markets look a little further ahead than you seem to think. NO ONE was talking about unemployment extensions or payroll tax cuts in this bill. The markets knew that weeks ago - they were never pricing that into equities. They aren't going to suddenly start crashing this week because of that - it's not new information.

 

Markets lost confidence from this process. Combination of economic news plus not addressing economy in debt debate was a double dagger. To say markets always look forward and don't take into account current events is foolish and naive.

Payroll taxes and unemployment benefits were not a priority until the weak news came out, now investors see the folly in the debate and that we've actually cut spend during a time we are looking at years of a weak economy.

Market is reacting to the poor fiscal planning of the gov't with a negative outlook. This isn't about 2012, it's about the future for sure, the future that has been negatively impacted by the present.

 

...still waiting for you to mention how major corporations have already said they have seen serious weakness in the US and Euro economies.

And you act like there is major austerity coming in the next 2 years. There simply is not.

 

There is in the US...on the state & local gov side.

 

I think it is Europe also. The DOW almost reached a 1 year high due to soaring corporate profits just a couple weeks ago. Now we are seeing the market collapse as Italy and Spain are suddenly struggling with debt.

 

Sam the info you showed me was that total govt spending was flat. Isn't total govt spending a better way to view it?

Edit...also I want to say thanks for showing that info before. I have been using it in any govt spending discussion I have had lately.

 

Well I think its Europe combined with major industrial conglomerates seeing economic weakness and then the initial GDP report being off by 80% that have spooked people. Some decent growth was being priced into the very strong corporate earnings, but that rug got ripped out from under the market and now weak to possibly negative growth is being priced in very quickly.

 

I think the total was flat because increased federal was offsetting state & local from 09-11, but with expiration of fed unemployment benefits, exhausting of stimulus etc & latest round of state & local budget cuts, total G probably continues to drop into the next few FY"s.

 

Of course they take into account current events. Payroll taxes and UE benefits not being extended are not current events - they were never in any serious debt discussion and the market was never pricing that into anything. To connect that to today's market selloff is utter nonsense. Just look at the news - the ECB is intervening in European markets. There's a liquidity crisis all over Europe and a mad dash for cash. That's what causing all of this.