Karl Denninger on the tax cut deal

"Estimates are that the package will add $500 billion to the deficit ($900 billion over two years)
from where we are now.

If that's anything close to accurate we're in big trouble
 - we're running $1.6 trillion now! 

I'd hope there are some offsets in there and this isn't the net change
- it's difficult at this hour to know
- because if it is net change we're going to hit the wall once the market figures this out.

This isn't done yet
- there are people who deeply unhappy with the deal on both sides of the aisle. 

...I hope I'm wrong on the numbers - but I fear I'm right.

A $2 trillion deficit would put our deficit over 14% of GDP next year,
which is higher than the level that triggered the explosion in Greece and Ireland.

And there is nothing in this proposal that offsets with spending cuts,
so as far as I can tell, it's all going right on the credit card.

I'm all for tax cuts provided we match 'em dollar-for-dollar with spending cuts. 

Even better is two dollars of spending cuts for a dollar of tax cuts. 

But of course we didn't get that, which makes this a really bad deal for America all around."

Karl Denninger