Tag Archives: debt deal

Lying for Politicians

With the recently passed debt ceiling deal, there are going to be a lot of news reports talking about how that deal is going to force cuts and reductions in government spending. Everyone one of these stories will be a lie.

Take for example this story today in Nature, discussing the fate of science research under the deal. Here is how they describe what will happen if the Congressional “super-committee” cannot come up with an agreement and across-the-board “cuts” are triggered:

“Then there will be extraordinary pain,” says Michael Lubell, director of public affairs for the American Physical Society in Washington DC. “And it will get worse in 2014.”

The two-stage structure of the debt deal explains both the short-term reprieve and the long-term worry. The first set of agreed cuts, totalling US$917 billion, will be spread over 10 years, but two factors mitigate their effect. First, reductions to defence spending will account for a significant share of the cuts — meaning that other US agencies won’t bear the entire burden. Second, the cuts are heavily loaded forward onto the 2014 fiscal year and beyond, in an apparent effort to shelter the current fragile economy. Only minimal cuts will be implemented in fiscal years 2012 and 2013.

The trouble with this is that it is simply not true. There will be no cuts at all, under any condition, according the debt deal.
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Dow dives below 12,000

The Dow today dived below 12,000, a nine-month low.

The report above tries to look past the just signed debt agreement, but I wonder if maybe it was the debt deal itself that worried investors, since the deal really did little to gain control of the federal government’s out-of-control spending.

Update: “The joint committee process is yet another promise by Congress that it will get spending under control — just not now, but rather some time in the future, always in the future.”