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Adverse Reaction

Recorded on August 2, 2011

From The Heritage Foundation, I'm Ernest Istook.

The political class warned that markets would crash and America's credit would be downgraded unless government was allowed to borrow trillions more.

The legislation went through, but the stock market still had its worst day in a year. And we still got a new warning that the outlook is negative for the U.S. Government's finances.

Politicians might approve a bad deal and try to make it sound good, but the financial analysts see right through the gimmicks.

Let's not fault those who tried—but failed—to get liberals to approve immediate spending cuts, not just transparent promises to make cuts in the future. A political panic took hold that raising the federal debt limit was all that mattered. It wasn't. Creditors need reassurance that America will indeed honor her debts—but they also want government to get spending under control, so that honoring those debts won't be so difficult.

From The Heritage Foundation, I'm Ernest Istook.