This is the Cato Daily Podcast for Wednesday, August 3rd, 2011.

I'm Caleb Brown.

The debt deal was supposed to deal with debt.

It doesn't.

It was supposed to call markets and raiding houses. It didn't.

Most immediately it was supposed to cut spending over the next decade. It doesn't do that

either.

Jagadish Goklay, Senior Fellow at the Cato Institute, comments.

If the goal here was to calm fears in credit markets and to reassure credit rating agencies and creditors that the United States has, how would you

evaluate Congress's performance here?

Well I'm disappointed on all counts.

If the objective was to calm fears in the capital markets, this deal is very, very small relative to the size of the

problem we face down the road. We know that Social Security and Medicare alone have budget shortfalls to the tune of $40 trillion

looking forward 75 years.

That means these programs have a structural imbalance built into the

current policies on these programs. And it's not nowhere close to being resolved with a deal that reduces deficits over 10 years by just 2.5 trillion dollars. It's just a drop in the bucket relative to the size of the problem.

So if markets down the road are concerned about whether this problem will recur, how soon it will

recur, what are going to be the policies that they will have to contend with over the next few months

in the next couple of years.

This deal puts in place so many complicated procedures and

frameworks for achieving the goal of cutting 2.5 trillion dollars that just on that count alone market uncertainty is probably

even greater now than it was earlier. So just to clarify then, what markets want is a steady dependable tax regulatory

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