Debt deal only slows acceleration of problem

The latest vote on the debt deal in the US Senate was entirely about political theater, believes Sassan Ghahramani, the president of a financial advisory service.

In Sunday’s session in the Senate the Democrats’ debt plan – which included $2.2 trillion in spending cuts – fell just ten votes short of being approved as a possible means of dealing with the country’s tottering finances.

The plan, which had been put forward by Senate Majority Leader Harry Reid, gained 50 votes for but was opposed by 49 voters. To go through the legislative body, the bill needed the approval of 60 members out of 100.

It was “quite a waste of time,” Ghahramani said, but admitted that there was some progress towards a more comprehensive deal.

It’s good that it’s happening, but the way it’s happening is not very good,” he noted.

According to Ghahramani, the most aggressive type of compromise will only manage to bring down the US debt level to about 80 per cent.

So right now we are just talking about slowing the acceleration of the problem,” he explains.

As far as putting us on a good trajectory, we need something closer to $3-4 trillion over a 10-year range to even begin to address it.”