For weeks the attention of the country and world financial markets were fixated on Washington DC and what was variously referred to as a debt ceiling, default risk and budget crisis. It seems a deal has been struck and though details of it are coming to us in dribs and drabs, the gist seems to be an agreement to raise the debt ceiling by just under a $2.1 trillion in two stages, sufficient to push the next debt ceiling debate out past the 2012 elections. In turn, spending is to be cut $917 billion over 10 years. In addition it charges a special committee of 12 to the task of finding an additional $1.5 trillion in deficit reduction by November 23rd. If the committee fails to find the cuts, $1.5 trillion will be cut between domestic and military spending, again over the next 10-years.

So we're raising the amount of debt we can take on in the next two years by $2.1 trillion, in return for spending cuts of $2.4 trillion over the next decade.

The bottom line is a more or less immediate hike in the amount of debt owed by the U.S. weighed against a slightly larger amount of spending cuts spread out over the next decade. For all the kicking and screaming, all the scare tactics on both sides, all the moaning and embarrassment, the only thing accomplished was setting a rate at which the United States spends money it doesn't have.

The risk of actual default was illusory. The budget was addressed only in passing and with nothing even slightly resembling a resolution, and the debt ceiling was raised just as it has been dozens of times since instituted.

In terms of a credit rating it's up to Standard & Poors and Moody's to bless this deal (which they really can't) or live up to their threats of downgrade which they likely won't do for entirely political reasons. The rating of the U.S. is a moot point regardless as a) the market sets rates, and b) the world has no where else to go. In effect the downgrade has already occurred and the impact has been minor, at most. What Moody's and S&P have to say about it doesn't much matter. The market sets rates and has already spoken.

Which leaves me the task of breaking down the winners and losers in the Debt War of 2011:

Winners

The media: Summertime generally equals ratings death for both basic cable and networks. This summer every talk show and talk show variant had an endless number of topics to hash out and what in effect was a government subsidized crisis to report.

Social Security beneficiaries: Social Security will never be touched. Not ever. This is bad news for those who currently pay Social Security taxes, but good news for everyone who will one day receive SS benefits. At least in theory.

Losers

The Presidency: The President has announced that the deal lets the nation avoid a financial crisis caused by Washington. There are a couple of problems with this. First, this wasn't a crisis. The Cuban Missile Crisis was, appropriately enough, a crisis. This was politics. The President failed to lead. He didn't or couldn't exert his will to control the tone of the conversation. He even failed to notice the irony of the President of the United States blaming Washington DC for creating a crisis. The President's job is to control Washington DC and be the captain of the ship. This debate illustrated the degree to which the office can be neutered with an ineffectual leader.

Republicans: The Right clung so hard to a vow not to raise taxes that they sent us to the abyss. Was not raising taxes to throw money into the train wreck of government noble? Sure. Was signing off on a deal which simply pushes a real solution out into the future an actual solution? No way. It's not a fiscally responsible move to spend more in the now with a vow to save more in the future. Celebrating this solution as a victory over runaway spending is ludicrous.

Democrats: Simply a battering for the Left. The Democrats own the White House and they've been reduced to calling the Right "children" and "terrorists." Making the rich "pay their share" and sticking it to an imaginary body of people who own their own jets isn't an economic policy.

America: We look ridiculous. We have become ridiculous. America remains the best country on Earth by most if not all reasonable measures, but the spread between us and the rest of the world has closed ever so slightly over the last months. The politicians have been revealed as short-sighted fools but we elected them.

Shockingly the debt "resolution" has no impact on our stock market. Our futures were up as much as 1.5%, the markets opened with a bang, but the debt ceiling rally faded by 10am today. The market is voting, and it's the economy that matters.

This of course is strictly my view. I encourage you to watch the video and let us know what you think in the comment section below.