Things are looking good… for now. It appears as though the Republicans and Democrats have inked a deal which will allow the US to raise their debt ceiling enough to avoid defaulting on their payments, which come due tomorrow. This is good news for interest rates and investments, however, did the terms of this deal really fall in favour of the American people?
Rather than raising tax rates, they simply cut spending in a number of different sectors. To me, this would mean that the average-income earning American citizen (majority of the population) will feel the largest impact, as class sizes in schools continue to grow, or crime rates in their neighbourhoods rise because police staffing has been cut back. These are the types of sectors that could very well experience spending cuts. Meanwhile, the smallest percentage of the population – the extremely wealthy – will feel little to no impact at all. The old adage of, "the rich get richer, the poor get poorer" continues to become a way of life with our neighbours to the south.
Is it just me, or did the Republicans seem to treat this ordeal as nothing more than a "political game". Their "game" of 'how to make the Democrats look as bad as possible', caused the entire global economy to teeter on a financial fence, wondering which way they were going to fall. In the end, I don't think the Republicans did themselves any favours at all. The majority of the American population was aware of the potential calamity that could have come to fruition if the US were to default on one of their payments. Any American who watched the Republicans play with this fire, simply to try and get an edge in the voting polls next year, cannot feel that their best interests were always on the forefront. If you read in to the details of the deal, it would appear that the Democrats have been bent over on this one – The Republicans received almost everything they were wagering for, except for the raising of the debt ceiling.
In the end, I guess Obama knew what had to be done, and did everything he could to avoid a total financial meltdown. Yes, the immediate crisis has been averted. But, have they just put things "on hold" until after the 2012 elections? I guess only time will tell.
Read the full article here.
What is your opinion?