Debt deal offers only small blessings for U.S. economy

[xchrom]

http://uk.reuters.com/article/2011/08/01/uk-usa-debt-economy-idUKTRE7700QU20110801

(Reuters) - The tentative U.S. deal to avoid a crushing debt default is at best a mild relief for the U.S. economy that nearly stalled in the first half of the year and has yet to show signs of any realistic pickup.

The plan for $2.4 trillion (1.45 trillion pounds) in spending cuts over a decade, if backed by lawmakers, would help lift some of the uncertainty that has weighed on investors, businesses and consumers unsettled by talk about a possible new and deep U.S. financial meltdown.

Still, it does not decisively remove the threat that the nation's AAA credit rating could be downgraded, an action that would raise borrowing costs across the board, and the prospect of further cuts ahead will cut short any celebrating.

"This will have minimal impact on the economy. The cuts are not there for the first couple of years, which really makes you wonder if they're really going to happen at all," said Peter Morici, an economics professor at the University of Maryland.



***morici should choke on his words.

[customerserviceguy]

1. Also, it prolongs the uncertainty

What business is going to hire anyone, when they're not sure exactly what's going to get cut, or even what taxes might hit them from the super committee? What if across the board cuts happen instead?

Giving people the blueprint for what will happen lets them plan around it, now we're in guaranteed limbo for the next five months. But the Asian markets are happy, as well as Wall Street, so I guess that's all that matters.

[indurancevile]

2. here's another way to stop the nation's credit from being downgraded:

tell those sons of bitches at standard & poors we're going to jail them for their fraudulent operations during the housing bubble.