More tomorrow, but...

[solarbird]

I'm still thinking about what I want to say overall, but have a few quick takeaways:

1. This deal is terrible. The only good thing in it at all is that it doesn't throw a hard shock into the financial system as we're heading into the second dip of a double-dip recession. Not a dime in new revenue, not a wetslap's worth of actual cuts; this addresses the actual problems in no way whatsoever. It's a stagger-along-a-couple-more-years nicotine patch to the ass. Good job, guys, by which I mean what the fuck is wrong with you people?

2. Keyesnians, kiss any ideas about further stimulus goodbye; the best you're going to get is the Federal Reserve's plan for QE III, and that's going to get sucked up by the financial system just like QE I and II. Have fun with that. Hayakians, in case you're buying the spin: these aren't cuts - I hear there's around us$40B in actual cuts in this, everything else is reductions-in-increases, and almost all of those other than the Iraq/Afghanistan war wind-downs is shuttled off to 2013, and thus utterly meaningless. And the mainline GOP is already protesting the military wind-down. As much as the Democrats are taking it in the teeth on this, so are you.

3. Supercongress? Seriously? Are you fucking kidding me? You're going to build this sideshow attraction? Oh, you are. Christ, what a completely purposeless pantload. The only good thing that could possibly come out of this is that it could generate enough distraction that Mr. Bush's incredibly unproductive upper-income-bracket tax cuts are allowed to expire - eventually.

4. But regardless of that, one thing you should all take away from this is that the US has called S&P and Moody's bluffs. This deal basically says, "Go ahead. Downgrade us - if you dare." To my mind, neither of these agencies have any credibility left whatsoever, but despite a decade and a half of spectacular failure, they're still paid attention by many. If they don't pull the downgrade trigger after this - after being so very specific about what needed to be done to keep AAA - I think they'll lose the Street. They deserve to.

More later. And oh, because I posted about it over the weekend and I want it to stay at the top of my LJ and Dreamwidth journals: I released a new pay-what-you-like song on the Cracksman Betty project - "Captain Kidd." More on that in the Sunday post, but basically, it's about the eponymous pirate. Enjoy!

Captain Kidd
Dara Korra'ti

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Comments

[st-rev.livejournal.com]

HNNNNNNNNNNNNGH

[solarbird]

Hopefully that's at the economics, not at the music. XD

[silussa.livejournal.com]

I'm rather waiting to see if the caucuses actually approve the deal. I figure that's a 50-50 shot at best; the tea baggers in the GOP are going to hate it, and so are the liberals on the Democratic side. Along with any serious budget hawks.

Of course, the alternative is, arguably, worse. But at this point, I think, only arguably.

As for S&P and Moody's, yeah, they don't really have a choice at this point. What everyone seems to forget is that rarely do you get downgraded once; it tends to be a series of downgrades. So, the US may go to AA, but that hardly means it will stay there.

[solarbird]

Canada's been down at AA+ before; it's recoverable. That's the good part.

[king-chiron.livejournal.com]

For that matter, for a downgrade to matter people have to believe that it's accurate AND that there are better alternatives. Where are people going to put their money instead? Europe? UK? Stocks?

We've been hearing for years how it's just a matter of time before the rates for T-bills SOAR (you know, with that hyperinflation that's just around the corner) and yet they continue to be steady if not downwards.

[gwendally.livejournal.com]

But regardless of that, one thing you should all take away from this is that the US has called S&P and Moody's bluffs. This deal basically says, "Go ahead. Downgrade us - if you dare." To my mind, neither of these agencies have any credibility left whatsoever, but despite a decade and a half of spectacular failure, they're still paid attention by many. If they don't pull the downgrade trigger after this - after being so very specific about what needed to be done to keep AAA - I think they'll lose the Street. They deserve to.

This is exactly what I was just thinking. Congress, for a variety of organically-grown reasons, is incapable of reducing spending. With the cumulative debt approaching the present value of all future projected revenues, and no management solutions likely, how can they NOT see the risk inherent in the putative "risk-free" investment?

The only thing I can determine is that they set U.S. Treasuries to 1 and then grade on a curve. Which means, eventually, we'll see some AAAA debt I guess.

[solarbird]

Your icon makes me giggle. XD

[silussa.livejournal.com]

First, I wish to apologize for the idiots I have insulted by the improper use of the term. I will henceforth restrain myself to using the correct term, "Congressmen".

Second, I believe it is time to reconsider our governmental structure. I suggest the following three options: Parluiamentary, Constitutional Monarchy where the Monarch both reigns and rules, and the ancient tyrant system.

[llachglin.livejournal.com]

I'm relieved that it's mostly fake cuts. The more cuts we have now, the worse for the economy. It's probably enough as is to put us back into technical recession and start increasing unemployment again, because cuts in planned increases rather than absolute cuts are still cuts relative to inflation and GDP and will be contractionary. So, hello Republican president, enjoy your turn at the helm of a lost decade or two.

This is actually pretty good as far as deals go only because it does almost nothing, and doing nothing (except a clean debt ceiling bill) was better than doing a bunch of the wrong things. However, I think you can pretty much count on the commission failing, because Democrats will and should never vote for cuts to Social Security and Medicare benefits, and Republicans will never accept deep revenue increases. So we're left with complete expiration of the Bush tax cuts and deep cuts in military spending when that fails. I'm actually OK with that, but depending upon the timing it could still be really bad for the economy. In that case I'd hope for a short-term extension of tax cuts for incomes under $250k and a new round of stimulus, but that's unlikely too. Because oh my god we can't actually invest in our country when it's falling apart and our economy is thirsty for more demand.

Of course, there's nothing keeping a future Congress from just spending more money during budget appropriations next year and for every year going forward, as if this agreement was never made. They could even restore the triggered cuts. I hope they do ignore it (except for the military spending, and that should be replaced with more infrastructure spending). But that just goes to show how empty this all is. But this year's effects alone will be bad for the economy, and pretty much guarantee a far-right presidency instead of the center-right one we have now.

[maellenkleth]

Perkele.

My (admittedly-foreigner's) take on this is that all three of the parties involved have missed their chance to actually do anything constructive. The only winners in all of this are the banksters who've been siphoning cash out of the economy.

[partywhipple.livejournal.com]

My brain... ow