Done Deal

The debt limit deal is done. A “crisis” manufactured by the White House has passed and a hypothetical “default” has been averted. Whoopee! Not.

In reality, Democrats and Republicans did not get spending under control, did not do anything meaningful to reduce the deficit, did not address the correct deficit problem—entitlements, and did absolutely nothing to restructure a tax system that is so broken that 50 percent of the populace pay no income taxes whatsoever (and yes, “millionaires and billionaires” use unnecessary loopholes to reduce their already significant tax burden).

No wonder the legislation was signed with little fanfare by the President.

But in the background, moral preening has already begun. Liberal commentators like Tom Friedman call tea party participants—the only principled participants in this charade—the “Hezballah factor of the GOP.” Vice President Biden calls them “terrorists” although his office now denies he said that. Another Democratic congressman calls the deal a “Satan sandwich.” The deal "trades people's livelihoods for the votes of a few unappeasable right-wing radicals," stated Rep. Raul Grijalva, D-Ariz. And the left-leaning MSM? Already they’re running stories of little children who won’t get heart transplants, yadda, yadda, even though they are clearly untrue.

My goodness, the politicians must have cut, really cut, deeply to get that many people that exercised.

The Investor’s Business Daily (IBD) did a little analysis and here’s what they determined:

According to IBD's analysis of available budget numbers, the deal's $2.4 trillion in 10-year cuts amounts to a mere 5% trim off total projected federal spending during that time. It's like a 400-pound man boasting that he plans to drop 20 pounds over a decade, while his doctors warn about the risks of losing weight so fast.

Even calling these "cuts" is a bit of a stretch, since spending will continue to increase, just at a slightly slower pace. (See charts below.) By 2021, federal spending would still equal 22% of the nation's economy, above the post-World War II average of 20%. Not really a cut, is it?

Plus, in the short term, these "deep," "sharp," "slashing" cuts would still leave the federal government spending roughly 4% more in 2012 than it did in 2010, and 20% more than it did in 2008.

Shorn of all the hyperbole, what this agreement really demonstrates is why it's so hard to get federal spending under control. Both sides routinely use budget gimmicks to exaggerate spending cuts, while armies of special interests swarm Washington to make sure their pet programs don't get touched.

Can you imagine what the reaction would be if we actually made substantive cuts, not small reductions in the increase of spending?

Sadly, you won’t have to.

Because in 3 or 5 or 10 years, Washington's irresponsible inaction on spending and the deficit will come back to haunt us all. Then the cuts will be real. Then there will be pain. And then, every supporter of the status quo will get a convenient case of amnesia and rail against the heartless politicians who will be left with no more choices. It’s gonna happen, and it won’t be pretty.