Due to the disruption caused by my grandmother's discharge from hospital I've not been able to read through - in any great detail - America's Budget Control Act 2011 that was passed into law yesterday (2/8/11) allowing America's debt ceiling to be raised by $2.4 trillion. However it seems to be largely based on Speaker of the House, John Boehner's plan of July 25th.
This means that none of the $2.4 trillion of new borrowing will be offset by tax increases or the closing of tax loopholes. Instead the US government will cut $900 billion in spending immediately. A bipartisan panel of Congressmen will then be set up and will report back in November 2011 with proposals of how to cut the further $1.4 trillion in spending. If that panel is unable to agree on new proposals or if Congress fails to pass those proposals then a pre-agreed package of cuts will automatically go into effect.
In short the Republicans got everything they wanted and the Democrats got nothing that they wanted. So the best thing I can say about the deal at the moment is that it is better then no deal.
And if you want a clue of how badly the Americans got massacred during the whole process this post has taken me half an hour to publish amid major technical problems.
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