One Fiscal Crisis Averted; Another Just Beginning

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This week's fiscal cliff agreement may have averted one crisis, but the work to avoid an economic disaster is only just beginning.

Experts say the $620 billion in higher taxes due over the next decade from wealthy Americas will barely touch deficits still to come.

"We've got nothing on the table right now talking about fundamental problems which includes too much spending, money printing, borrowing," Bill Frezza, a fellow at the Competitive Enterprise Institute, said.

"Rome wasn't destroyed in a day," he continued. "It takes a long time to run down a large economy and run down a large empire. We are on that glide path now, and there is no reason to believe this is going to change."

Watch all of Frezza's comments, as seen on CBN Newswatch, Jan. 2 below.

Among the issues that the fiscal cliff deal failed to touch on are the following:

  • In only two months, painful across-the-board spending cuts to the Pentagon and domestic programs are set to kick in.
  • The government is on track to reach its limit on borrowing unless Congress allows President Obama to increase it. This puts the United States dangerously close to defaulting on its obligations for the first time ever.

The president said he hopes these issues can be addressed with a little less drama than the fiscal cliff deal.

"I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up," he said.

But many Republicans feel they were backed into a corner with the fiscal cliff deal, and they refuse to budge on increasing the debt limit without drastic cuts to federal spending.

"We're adding $4 billion a day to the debt," Rep. Spencer Bachus, R-Ala., said.

"I know the president likes heckling and likes pep rallies to try and get Congress to act instead of actually negotiating," Sen. Bob Corker, R-Tenn.

Moody's Investors Service has a negative outlook on the government's massive debt. It warns of a possible downgrade if Congress can't come up with a plan to shrink the deficit.

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