Congress raised the borrowing limit and managed to avert the worst case scenario for the economy. Now what?
It is highly likely that our elected representatives in Washington will prolong the sub-par growth with fiscal policies rooted in dogmatic principles that ignore the fundamental workings of our modern economy. It is a sad truth that the economic potential of the United States is being handicapped by ignorance and ideology. The following excerpt from The Economist sums it up nicely.
In the end, hopes for a grand bargain that addressed entitlements, taxes and near-term economic support ran aground on the harsh reality that all these things would require bridging profound philosophical differences that have developed over decades. The odds that the next few months will yield a different outcome seem low: further brinkmanship (albeit of a less terrifying sort than seen in the past weeks) is more likely. That has become the routine way that fiscal policy gets made in America. True, stockmarkets rallied with relief that the most reckless path has been avoided. Meeting such a low standard should hardly be considered a vote of confidence in America’s fundamental fiscal and political maturity.
Source: The Economist, Nuts and bolts, www.economist.com/blogs/freeexchange/2011/08/debt-ceiling-deal