Saturday, August 6, 2011

Update on Debt Crisis/FAA Budget

Well they went with the  mix of all the Debt Limit solutions, as I was almost predicting.

They did a little bit of Mouse by pushing the harder stuff out to a committee to be decided later.   A little bit of Chicken by only planning on cutting 2 trillion instead of 4 trillion.   A bit of Cat via spending cuts without tax increases, a bit of dog with no cuts to Social Security, etc.
 Worst of all, as I feared, we also got a bit of  Ostrich with one of the three major credit raters downgrading us. Standard & Poors says we are only AA+, not AAA. (My original post said: "Also, if we are not careful, we can get Ostrich with any of the other ones in that even with a solution, investors may start to worry about what happens next time.  Just because we pay our debt does not mean inflation won't happen anyway.")


The FAA Budget deal was a bit better.  We funded it till Congress comes back.  It look like the GOP is going to win the elimination of a few of the rural airport subsidies (if they had real character they would cut at least 50%, but it looks like they won't cut more than 16 out of the 140 airports getting paid subsidies.)  It also looks like the Democrats are going to stop the one sided Union rules the GOP tried to push through.

But while they did extend the budget, it was only till September - so no real confirmation on the FAA budget yet.

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