New News - Debt (Michael M)

Their are seven truths in the media and the one I've always been fascinated by is number four, "Everything that happened in the past will happen again." There are many issues in the United States, but none are getting the focus the US debt has been getting in the past few week, and as truth four says we've been here before. What makes this time so different is that the Democrats and Republicans have been unable to come. Perhaps the most unbiased opinion to find would be from outside of the US, and BBC News is able to provide that. As the put it the Republican plan would have "Congress approving cuts in the health programmes for the poor and elderly, and would not include new revenues." while the President, and by extension the Democrats want "wealthy Americans and businesses should contribute to reducing the deficit through some new taxes". With the two plans at odds with each other the BBC continues to say that with the August second deadline quickly approaching should an agreement not be reached not only would the US's economy be threatened but the world at large. This is due to the rest of the world losing faith in the United States economy.

Continuing the stance of reporting just the facts, the New York times provides the two plans. Democrats "Over the next ten years, it would cut $1.2 trillion from federal agency budgets and wring some savings from recurring programs such agriculture subsidies. The proposal also counts about $1 trillion in savings from winding down combat operations in Iraq and Afghanistan" as well as increasing debt limit for until 2013. While Republicans do agree with an increase to the debt limit they only want it to last until the start of next year, a move many Democrats are calling a move to make it an issue in the 2012 election. One of the thins to Republicans I really pushing for is a balance budget amendment and "a new 12-member committee evenly divided among Democrats and Republicans would be assigned the job of finding another $1.8 trillion in savings." Interestingly the New York times doesn't address Republicans refusal to increase taxes.

In USAToday the key issue was the economic effect the inability to reach a deal would have. With the doomsday clock ticking down Wall Street is on edge on how things are going to play out. With warnings coming in from all sides that "catastrophic harm to markets and the economy would occur if Congress doesn't raise the debt ceiling by Aug. 2 and agree on a deficit-cutting plan big enough to help the U.S. keep its sterling triple-A debt rating." For the time being though, the stock market hasn't been hurt as badly as many have speculated with many betting that some agreement will be reached in time. With USAToday describing both sides as having many common points their greatest interest was in how the market will react to the final call. Each of the possible outcomes having a different result; with bold steps to reduce the deficit and cap spending a bullish market is likely, should they only increase a debt ceiling some say the market will stumble, but it won't be overly bad, but should they reach no agreement put simply things in the US would go from bad from worse.

On the very Republican news site Fox News they choose to address the issue by not addressing it. Look most agenda setting groups they simply forcued on what they wanted you to think was an issue, here the "war savings" on the the Democratic plan. They warn that since the military involvement in Iraq and Afghanistan was being phased out it shouldn't be counted. They then processed to point the finger at Obama for things having gotten this bad. In all they hardly address the Democratic plan and didn't at all bring up the Republican plan. Interestingly while watching Fox News they were also blaming the Tea Party for part of the problems with getting things done.

Thanks to the beauty of the internet as I was writing this the Huffingtonpost was able to do a summary on President Obama's and John Boehner's media briefing this evening. Quoting the President they draw attention to how he feels the preceding have become a circus and things should not be this dysfunctional. He then went on to criticize the Republican six month extension as not solving the problem at hand. Boenher on the other hand says their is no stalemate and the only opposition to the bill is coming from Obama himself. He goes on to say that the "balance" plan Obama wants has you paying more as they pay more. Moving on they continue to look over the whole spectrum addressing the relaxed feelings on Wall Street and how while both sides want to increase the debt ceiling Democrats want one to last until 2013 while Republicans want two votes with one happening in the middle of election campaigns for the White House and Congress. They go on to say that all the fanfare surrounding this is creating a much greater appearance with one of Obama's greatest demands, an increase in revenue not making it into either sides most recent plan.

http://www.bbc.co.uk/news/world-us-canada-14285268

http://www.nytimes.com/2011/07/26/us/politics/26fiscal.html?_r=1&hp

http://www.usatoday.com/money/markets/2011-07-25-wall-street-debt-ceiling-talks_n.htm

http://www.foxnews.com/politics/2011/07/25/congress-warned-credit-downgrade-if-war-savings-counted-as-deficit-reduction/

http://www.huffingtonpost.com/2011/07/25/obama-debt-ceiling-address-nation_n_909212.html