According to the Economic Policy Institute, the debt ceiling deal will slow economic growth. Not by much, but some. More importantly, the deal will kill 1.8 million jobs. That’s bad.
The agreement would reduce spending by at least $1 trillion over 10 years, but even the near-term cuts could shrink already sluggish GDP growth by 0.3% in 2012. According to EPI, the plan “not only erodes funding for public investments and safety-net spending, but also misses an important opportunity to address the lack of jobs.” In particular, the immediate spending cuts and the “failure to continue two key supports to the economy (the payroll tax holiday and emergency unemployment benefits for the long term unemployed) could lead to roughly 1.8 million fewer jobs in 2012.”
That’s quite a platform for when the real spending cuts happen in 2013. A year when job creation has been handcuffed followed closely by a serious round of cuts.
Again, this is one of those rare moments when I hope the hope of all hopes that I’m wrong on this. But I don’t see anything positive in this. Nothing.