Tuesday, July 19, 2011
Gang of Six plan sends debt ceiling crisis in new direction
We were close to having a resolution of the debt ceiling crisis with the McConnell-Reid plan, then the Gang of Six unexpectedly showed up and now everything is up in the air once again. The president, as is his habit, is snatching defeat out of the jaws of victory by praising the Gang's plan. There's not too much info on it, but I found this on the Firedoglake website. CNBC is praising the news as a "breakthrough" and "possible deal." (They know nothing.)
Set aside whether or not there will be the required 60 votes in the Senate to pass this (although some Republican senators are saying it will "easily" pass), or enough support in the House, let's just assume it passes.
Here are some of the early details of the plan:
Immediately implement aggressive deficit reduction down payment of $500 bln. (Not sure if all of this happens right away.)
Strictly tighten the government’s budget processes
Impose spending caps that can only be exceeded by a 2/3 majority vote
Restrict the use of emergency designations that circumvent caps
There's a lot more, but it basically looks like a gold standard in sheep's clothing. It's a recipe for economic depression or at best, long-term high unemployment and stagnation.