The impasse is finally over. After weeks of political posturing and endless debates, the US House of Representatives finally passes a bill that addresses the country's pressing debt concerns. The US Senate is expected to ratify the bill at noon on August 2, US time, and be signed into law by President Obama soon after.
Bad news for those who are wishing for another crisis, and good news for everyone else? Maybe.
Apart from increasing the US government's debt limit to avoid default, the deal also includes provisions to decrease government spending by US$$ 2.1 trillion spread over 10 years. However, some experts point out that while the bill may adequately address the US's immediate fiscal issues, it may not be enough to make any lasting difference since it does not involve any attempt to increase revenues (by repealing tax cuts implemented during the Bush administration, for example). The US government survives this one, yes, if only barely, but there's no reason to celebrate yet... not by a long shot.
Asian markets reacted favorably to early news of an agreement between Democrats and Republicans, with sharp price increases at yesterday's trading. More realistic expectations about the goings on in the US may have just sunk in today, however, as the Hang Seng Index in Hong Kong and the PSEi in the Philippines suffer losses as of this writing (noon of August 2), wiping out gains made the previous day.
UPDATE: 08/03/2011, 11:00 AM
President Barack Obama signs the debt ceiling bill into law
UPDATE: 08/03/2011, 12:30 PM
Fault Lines: The Top 1% - A very relevant documentary from Al Jazeera