After an agonizingly protracted battle, congressional leaders and the president reached an agreement to raise the debt limit, with some minor cuts in spending now and supposedly more cuts in the future, cuts that will be determined by a bipartisan panel.
There has been considerable rending of clothes and gnashing of teeth on both the left and the right sides of the political spectrum. But really, the agreement probably captures the mood of the majority of Americans.
As I have noted before, people are only just beginning to see the entitlement spending iceberg towards which the nation’s economy has been sailing for decades. But polls show that the public — including self-described Tea Party members — still strongly support the major culprits in the fiscal follies with which the country is beset: the entitlement programs, especially Social Security and Medicare.
In sum, the public is beginning to see the problem, but remains clueless — or, to wax Nietzschean for a moment, deliberately blind — to the real cause of the problem.
The agreement had immediate effects; though not ones, I daresay, that were comprehended by the supercilious solons who spawned it. And I’m not talking about the Standard & Poor’s downgrade.
First, as the US Treasury reported, the national debt immediately shot up $238 billion to a grand total of $14.58 trillion, officially hitting the mark of 100% of GDP. We as a nation have hit that mark only once before, right after World War II, the biggest foreign war we ever fought. We are now there again, in a time of comparative peace. As the report drily notes, this debt level puts us in the league of countries such as Italy and Belgium.
The second effect was not a stock market rally created by the exuberant joy of investors, relieved that disaster had been averted, but instead a massive sell-off, caused at least in part by the recognition that disaster looms.
All this brings to mind the old adage: a country gets the government it deserves.