It appears Congress will meet the demands of the hostage takers (i.e.; Republicans) in time to meet the August 2nd deadline to raise the debt ceiling but the damage is already done. Even if there is no default and we maintain our AAA rating, Moody’s has stated that “As to the longer-term outlook on the rating, the limited magnitude of current deficit reduction proposals suggest that even a timely increase in the debt ceiling will lead to the assignment of a negative outlook on the rating.”
In fact, there have already been real consequences. The Dow closed 4.2% last week as a result of uncertainty. That’s more than $700 billion lost in one week of arguing about $2 trillion in cuts over 10 years!
Instead of comprising, House Speaker John “Scarface” Boehner rallied his goons. “I didn’t put my neck on the line and go toe to toe with Obama to not have an army behind me,” Boehner told his party in a private meeting. Unfortunately, that army has declared war on the middle class! And President Obama has readily surrendered by agreeing to cuts to Social Security, Medicare, Medicaid, student loans, and Pell Grants but no revenues from either taxes on rich or closing of loopholes in the tax code.