This past Tuesday, President Obama got all excited about the possibility of ending the budget/debt deadlock in Washington as the result of a four-page “Bipartisan Plan to Reduce Our Nation’s Deficit” prepared by a bipartisan gang of six senators. That same day the Dow Jones Industrial Average rose 202 points or 1.6 percent. Yesterday the leadership of the European Union announced in a four-page memorandum that an agreement had been reached on how to avoid a EU-threatening default by Greece. Accordingly, stock markets all across Europe rose in jubilation, with the most troubled countries feeling the greatest sense of relief: Portugal, 2.8%; Spain, 3.1%; Italy, 3.5%; and Greece, 3.9%. Germany, the country that will bear most of the burden of Greece’s bailout, not so much: 0.9%. In expressing sympathetic enthusiasm, on that same day the DJIA rose another 152 points, or 1.2%. However, such optimism, on both sides of the Atlantic, is unjustified, as will become clear as soon as the devilish details are revealed.
The four-page Plan that so enthused Obama is a four-page laundry list of budget reductions that are to be written into legislation by the appropriate committees within six months. Savings over the next ten years are to include:
$202 to $85 billion from health services
$80 billion from Armed Services
$70 billion from Health, Education, Labor and Pensions
$65 billion from Homeland Security and Government Affairs
$11 billion from Agriculture
$11 billion from Commerce
$6 billion from Energy
You can be certain that any attempt to implement these wide-ranging cutbacks (expected to total as much as $4.5 trillion over ten years) will meet with stiff resistance. Every change, every saving, will paid for by someone, in loss of jobs, loss of essential government services, and a lowering of living standards. How long will it be before the people take their complaints to the streets? And will you be marching with them?
Robbie Williams warns “There are bad times just around the corner.”