We must conquer our debt disease

By Veronique de Rugy

• Standard & Poor’s warnings that even if the U.S. raises the debt ceiling, there could be a downgrade in early August if lawmakers don’t agree to a credible debt-reduction deal.
• The House symbolically passed the Cut, Cap and Balance bill, but this plan exempts big-ticket items that are the source of our future fiscal imbalance:
• There are a number of institutional reforms that can be passed in the near term to lock in the spending cuts and avoid the wrath of the credit agencies.
• The Balanced Budget and Emergency Deficit Control Act of 1985 (a.k.a. the Gramm-Rudman-Hollings Act) came out of a similar spending crisis and was meant to bind spending. By 1990, it was clear that Congress had put into place so many loopholes and exemptions that the framework had fallen apart.
• S&P has issued two warnings: one that triggers a downgrade if we default on debt payments and another that triggers a downgrade if the U.S. fails to commit to serious debt reductions when the debt ceiling is raised or shortly after.

This is the first time that I saw the dual warning reported upon.  The real issue is the spending.  Also was, always will be.

Well, that does it for today.  Thanks for coming by and have a great evening.