After weeks of excruciating, sometimes nauseating political maneuvering over the debt ceiling, a deal has been struck. Or has it? According to this story in the Washington Post, GOP Presidential frontrunner Mitt Romney has come out in opposition to the deal, a top Tea Party official has denounced it, and Michelle Bachman says she will vote no.
(As of 10 a.m. PDT, I see no comment yet from our own delegation, U.S. Rep. Rick Larsen and Sens. Patty Murray and Maria Cantwell.)
But amid all the commentary about who scored a political victory and who suffered a political defeat– written by D.C. reporters who cover national government as though it were a sporting event–it’s pretty hard to sort out how this deal will impact our economy and the people who depend on it.
Who could defend a government that depends on ever-increasing levels of debt to finance its operations? That approach, on a household level, caused the Great Recession we’re still trying to survive. It would, in the not t00 distant future, lead to a disaster in government financing as well.
But the relatively sharp cuts in government spending that are now in the works may have some awfully unpleasant side effects too. People who think this deal will help revive the economy may be in for a shock. As of this moment the Dow Jones is down another 100 points.