Is the debt deal a good deal for the United States?

It appears that the United States defaulting on its loans has been averted after a deal has been made between Congress and the White house in regards to a debt ceiling increase. 

However, there are still very important questions regarding America’s stability and growth as we move passed the debt deal.  To be direct, the path we are on as a nation is unsustainable!

The United States has a national debt of over $14 trillion and for every dollar it spends, forty cents of that is borrowed.  

On the right side of the debt negotiations, Tea Party Republicans and Conservatives were outright opposed to tax increases and closing tax loopholes that allow those to avoid paying taxes at their tax rate; while Democrats were deeply opposed to spending cuts that would impact Social Security, Medicare and Medicaid.

If one thing has been demonstrated, it is that this government can be highly dysfunctional when it comes time to do something that will help the United States.  As a result of this, it will continue to weigh heavily on businesses, those that invest in businesses, as well as the consumers…at least for the short term. 

From that, the cure for this economic crisis, economic growth, will now be even further hindered.  It should also be noted that it would be even harder to close the budget deficit with higher unemployment.  With the unemployment rate of over 9%, we just cannot close that deficit.      

So what did we get?

The Congress and the White House agreed on a Trillion dollars in spending cuts over the next decade and the debt ceiling would be raised about $900 billion dollars.  Here is the kicker, that raise will not even be enough to fund the government through 2012 elections…Sounds like a political game to me for the next elections with the United States being put in harms way. 

So what was should have been done?

There should have been a compromise between both parties that called for tax increases and closing the tax loopholes, as well as allowing spending cuts into social programs.  There should have been a minimum of $2 - $4 trillion in spending cuts over the next decade.  In addition, the defense budget can and should be decreased with both wars winding down.

This is still not over by a long shot and it will probably get even worse once the 2012 elections are upon us.  That is when we will see the real fight, but I still foresee the United States not coming out ahead.  We are on an unsustainable path and lawmakers are not doing what should be done for a serious solution to this real problem.