For those politicians that prefer to duck responsibility for the budget deficit crisis, the Deficit Super Committee offers a case study in a how not to kick the can down the road. The fourth months of getting the deficit off the front page only provided temporary relief.
As background, this disparate group of 6 Democrats and 6 Republicans is quickly running up against the November 22 deadline to engineer a $1.5 trillion 10 year deficit reduction plan. The committee was created at the beginning of August as part of the compromise that greased the skids for the last minute deal to raise the debt limit.
My guess is that if the committee does come up with a plan, it will be filled with budget gimmicks and the vast majority of the proprosed savings will be backed ended toward the last few years of plan. It will be practically void of the type of unpopular policies required to make any real progress on cutting the deficit. The most optimistic case is probably no better than that the Deficit Super Committee releases a plan that does nothing more than kick the can down the road. However, no one should discount the possibility that there will be a stalemate between the six Democrats and six Republicans. Whatever the results of the committee's work, the result is unlikely to meet the wishful thinking of the U.S. bond buyers. However, I would not expect a plan that is disappointing to the financial markets to lead to a huge increase in interest rates required to fund the U.S. debt, as I cannot imagine anyone being more than mildly optimistic about the likelihood of the Committee coming up with any real solutions. However, for anyone that is considering refinancing debt (mortgage, etc), now might be a good time to move quickly.
Expect the media to ratchet up their coverage of the upcoming deadline. It is a countdown that can be turned into attention grabbing little news bites. However, don't expect the reporting to have much meat about real solutions to the debt crisis.
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