Budget Debate Fraud Part 2

This article originally appeared in the Daily Capitalist [11].

This is the fun stuff about politics. Basically our politicians are being forced to do something they don’t want to do and our job is to cut through the obfuscation to see how they are doing exactly the opposite of what they say they are doing.It is fairly obvious that despite what they are saying publicly, they aren’t making significant cuts to the budget. And S&P and Moody’s know this. Which means that we’ll see our gilt-edged credit rating (a curious term since there is nothing really golden about our national debt) be cut anyway.
Please see the comment below on CDS rates on Treasurys.

$917 billion in cuts over 10 years. 2012 spending is capped at $1.043 trillion, $44 billion, or 4.2%, below the CBO March baseline of $1.087 trillion. 2013 spending is capped at $1.047 trillion, $62 billion, or 5.6% below the CBO March baseline of $1.109 trillion.

Then there is this bipartisan committee of politicians who will wrangle over how to cut another $1.5 trillion. If they can’t agree by January 1, 2013, cuts will be automatic across the board, one-half from defense and one-half from discretionary spending. Social Security, Medicare, and Medicaid won’t be cut. The debt limit would be increased dollar-for-dollar by the amount of the cuts.

They promise to have a vote on a balanced budget amendment by year-end.

Will the Bush tax cuts be allowed to expire? Yes, at least that is what Obama says will happen. I believe him.
This morning, David Stockman, Reagan's budget director, saw it this way:

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