US Budget Control Act of 2011: How Reduction Means, "Supersize me, Baby!"

1. I desperately want to critique of the US Budget Control Act of 2011. See, http://rules.house.gov/Media/file/PDF_112_1/Floor_Text/DEBT_016_xml.pdf

I'm afraid the tide of the noise will drown out the message. And yet I want to languorously luxuriate in the details of this Act because if LAW MATTERS (which is a bootstrap "theory" enjoyed by many presumptuous legal-financial academics) then of all the possible regulations that could frame the debate of macro-economic, micro-economic and financial-economic consequences, this particular Act has obviously the greatest significance over the next ten years. Reading between the lines is our attempt to divine the future of structural problems and solutions, and to suggest strategies of investment and divestment. Probably, major corporations throughout the world are ordering and paying an army of analysts to determine the specific cost-benefit effects of the Act on their own business, and even more specifically, starting to plan how "to lay their poker chips on the table."


2. I am assuming all the financial-economic analysis that needs to be done can be done with models and these models connected to financial trading markets will simply follow their
course. I also believe (without evidence except gut feel) that none of the said models can factor legal risk to any appreciable extent -- excepting of course those algorithms of high-end game theory that can factor in several hundred decision-makers at a shot. E.g., see Bruce Bueno de Mesquita at: http://www.predictioneersgame.com/.

3. Here now on August 2, 2011, the date the US government through its Congress and Executive decide to raise the national debt ceiling by 2.5 trillion dollars and cut government spending by a similar amount over 10 years.

BUT DOES IT???

4. A most cursory reading of the Act which purports to limit discretionary spending shows that actually the stricture is in the form of a maximum ceiling for certain named items:

(a) Under Title I: Discretionary Caps with Sequester, Sec. 251 Enforcing Discretionary spending Limits, subparagraph (b): Adjustments To Discretionary Spending Limits, sub-subparagraph (B) Continuing Disability Reviews and Redeterminations, we have a list of maximum spending limits that go from $630bn in fiscal year 2012 rising by about 20% per year to a maximum of $1.309 trillion in 2018. Wow, this is a fantastic budget reduction because it defies every basic mathematical definition I have ever learned! Less rhetorically, what do we learn about the supposed "budget control"? Well, it is actually a promise for a Controlled Binge to more than doubling its size! Supersize me, Baby!

(b) A similar legerdemain occurs under subparagraph (C) Heath Care Fraud and Abuse Control, which moves the spirit of $270bn in 2012 to $496bn in 2021.

I leave the reader to complete an analysis of the Act and to ask himself or herself "Is there any real reduction of expenditures anywhere in the Act?"

5. Honestly, if any journalist says this Act means what it is titled then that journalist has not read the Act and is a government propagandist.