04 August 2011

"A Great Deal"

My senior year at Notre Dame I went with some friends to Cabo San Lucas. The hotel had overbooked though, and told us we wouldn't be staying there.*  The manager's solution was to have us stay in some shitty place a couple of miles away, but still pay the higher rates for his hotel. He kept telling us this was "a great deal." One of my buddies, finally fed up, shouted across the front desk at him: "Listen, a**hole:  this is not 'a great deal.' This is not even a deal."

That sums up how I feel about this "debt deal." It is better than the fiscal equivalent of sleeping on the sidewalks of a foreign city, but it is not even a deal, to say nothing of 'a great deal.'

Political Calculations | Ironman | Visualizing Federal Spending Before and After the Debt Deal

So, to recap, when compared to the pre-crisis decade of federal government spending, instead of increasing at an annualized rate of 7.35% per year, the total amount of U.S. federal government spending is now projected to only increase at an annualized rate of 6.78% per year, thanks to the so-called "Budget Control Act".

No word yet on whether or not the nation's GDP will grow as quickly....
Click to enlarge.  Note that those projections use the optimistic CBO convention that planned cuts actually occur as promised.

* The name of the hotel that screwed us was Tesoro Los Cabos. Do not stay there.

PS We raised enough of a fuss in the lobby that we ended up getting rooms eventually.  The manager had thought he could placate us by sending us out to the pool bar with free drink vouchers.  This was a huge strategic mistake on his part. He thought we would wander away, seduced by cheap tequila and girls in bikinis like Odysseus' men amongst the Lotus Eaters. We like both tequila and girls in bikinis very much, but we also liked not getting shit on, so we took shifts shuttling back and forth from bar to lobby. Instead of having a dozen angry but sober men making his life somewhat difficult, he had five or six angry men drunk on his own booze making his life very difficult.


  1. Any speculation on what next year's "budget" would look like if this deal hadn't gone through? Think it would have been smaller than it will be now?

    When you first apply brakes to something moving in one direction, it doesn't instantly start moving the other way; it slows down first. We witnessed what is hopefully the first tap on the brakes, not the endgame.

  2. But we aren't slowing down. We're accelerating less quickly. It's not a tap of the brakes, it's easing off the gas very slightly.

    I share your hope that this is far from the end of things. I just don't think it's much of a beginning either.

  3. "Not much of a beginning" and "accelerating less quickly" beat "stomping harder on the gas pedal" is all I'm saying.

  4. True, "not much" is better than "nothing at all." But I worry that people are patting themselves on the back and relaxing after accomplishing "not much." That combined with the wasted opportunity may just be worse than the status quo ante.