Schiff: Debt Deal is a Blank Check

[dennis4868]

By supposedly compromising to raise the debt ceiling, Congress and the President have now paved the way for ever higher levels of federal spending. Although, the nation was spared the trauma of borrowing restrictions, the actual risk of default existed solely in the minds of Washington politicians. But the real crisis is not, nor has it ever been, the debt ceiling. The crisis is the debt itself. Economic Armageddon would not have resulted from failure to raise the ceiling, but it will come because we succeeded in raising it. This outcome falls along the lines that I had forecast (See my commentary, "Don't Be Fooled by Political Posturing" from July 9th).

Both parties are now pretending that the promised cuts in spending outweigh the increase in the debt limit. But the $900 billion in identified cuts are spread over a decade and are skewed toward the end of that period. There are an additional $1.4 trillion in cuts that the plan assumes will be identified by a bi-partisan budget committee. But similarly empowered panels in the past have almost never delivered on their mandates.

More importantly, none of these "cuts" are actually binding. There is plenty of time for future Congresses to reverse what was so laboriously agreed to over the past few weeks. My guess is renewed economic weakness will be used to justify ultimate suspension of the cuts. In addition, most of the spending reductions were already scheduled to take effect before this agreement.

Entire article is here...http://www.cnbc.com/id/43975590

[The Magistrate]

1. Nice To Hear This Bloated Wretch Whimper, Sir

[abelenkpe]

2. Schiff pushes austerity measures

No big surprise there. But austerity has not worked anywhere. Has appeasing banks while disenfranchising workers brought more social security or more upheaval? Has it helped Greece or Ireland? No it adds fuel to a downward spiral where workers lose jobs and governments lose revenue necessitating cuts where workers lose jobs and governments lose revenue and on and on and on.

This also increases social insabilty as more and more people see the government as ineffective. Not a path one should take lightly.

[woolldog]

3. Peter schiff?

Can't stand that guy. Don't listen to a word he says.