Halloween is long gone, but dress up as a super committee and you can still have a chance at spooking others. Hopes pinned on the committee to be able to find some solutions to $15 trillion of U.S. debt came crashing down this Monday when the committee conceded defeat. Not soon afterwards the stock market plunged as investors worried if this was another symptom of a “do nothing” Congress that would rather see the country burn than to risk making a move that can be used by enemies in the 2012 elections. Mounting fears over the Eurozone also contributed to the drop in the stock market.

Even Small Chunks Hard to Swallow

The super committee didn’t even have to tackle the full $15 trillion right away. The minimum goals were to cut 1.2 trillion over the next 10 years. This would have stopped $1 trillion in automatic spending cuts affecting the military and government programs from being triggered in 2013. President Obama has openly stated he will veto any attempts to repeal those cuts if some progress on the debt is not made. Specifically, President Obama is trying to leverage a deal whereby taxes would be raised for wealthy Americans. Republicans, however, refuse to agree to this stipulation and so even the small deals end up deadlocked.

Cuts versus Revenue

In order to balance any budget, the amount of income or revenue should not exceed expenses; otherwise, cuts should be made in spending. However, Democrats favor raising revenue via taxation on the rich while the Republicans want cuts on cherished programs like Medicare and Social Security. There is a philosophical divide that continues over how best to address the debt problem. If Democrats concede on cutting entitlement programs, their voter base will be furious. If Republicans raise taxes on the wealthy, then they will lose their voter base, also. No one wants to risk losing the election and each party is trying to outmaneuver for political advantage to make the failure of debt talks the other party’s problem. However, the public isn’t buying it and this Congress has a less than 20 percent approval rating.