Republican legislative limits on the Democrat administration's spending are just a band-aid on the government's soaring deficit, says an economist.
News that Republican House Speaker Kevin McCarthy had reached a deal with Democrat Senate majority leader Chuck Schumer to pass his bill limiting government spending in return for allowing the Treasury to lift its debt ceiling borrowing limit to an astounding £1.5 trillion.
Mark Frost told Sputnik that the media were misleading the people about the US treasury deficit and how much the spending limits agreed between Republicans and Democrats would lower it.
"It just seems like they take the pablum that the government gives them and they just put it on the page. Even this Wall Street Journal article that I read was I'm like, Really? Did you really write that or did the government write this for you?"
"Here's the headline: 'House Debt Ceiling bill cuts Deficits by 4.8 Trillion over ten years.' First of all, that's a lie. That's even beyond B.S." Frost said. "They're going to be increasing the deficit by trillions of dollars over ten years if their assumptions hold true, which they're not going to. The growth of the deficit over ten years will be 4.8 trillion less. But the growth of the deficit is going to be like 20 trillion."
And he stressed that no predictions could hold true over that timeframe.
"If you know what you call a forecast that's ten years — stupid. Because too much can happen from that, from your assumptions," he said. "It's just nonsense because there's too many knobs being turned and moved for you to be able to effectively do that."
The economist said the official inflation rate of six per cent did not include fuel, food or "the things that a third to half of the country actually buy," recounting how he had set his college class a project of monitoring weekly price price changes at the Dollar General chain of stores.
"Their prices are rising about 12 per cent a month. If you just go and look at the staples, they created a basket of goods that people buy like baloney milk, ice cream, ramen noodles, things like that. And it's clear that their prices are going up every single month."
In that context, a one-fifth cut in public debt is no relief to ordinary Americans, the professor said.
"Here's what they're actually saying. I condemn you to get whipped 24 times and I say, 'you know what? I'm a compassionate man. I'm only going to whip you 20 times'."
The expert predicted a deal, as usual, would be done before the government had to stop paying federal employees
"I don't think we're going to go over the cliff because I don't even think the cliff exists," Frost said. "This is so much sabre-rattling by both sides. And it seems like in modern history, it's always the Republicans that are doing this."
He said news that 24 countries had applied to join the BRICS partnership of emerging economies was far bigger than "this nothing-burger of whether we're going to default on our debt."
"We're not going to default on our debt," Frost insisted. "We're going to print the money that's required to pay the interest on our debt. That's what we're going to do, because it's what we've always done in modern history."
If the US does go "over a cliff," the consequences would be dire according to the economist.
"The International Monetary Fund, the World Bank, imposes austerity on us because we will have defaulted on our debts," Frost warned. "There'll be a mass flight from the US dollar into anything that's not a roller coaster — Probably yuan — and the United States will be a version of what Greece was 15 years ago."
To read what our commentator Mark Frost REALLY thinks of the US financial press, visit our Telegram channel.
For more fascinating commentary on US current affairs, check out our Sputnik radio show Fault Lines.