Now that we’ve had a few days to absorb the debt limit agreement signed by President Obama on Aug. 2, it might be useful to review what it did-- and did not--do. Here’s my Top Ten list.

1. It avoided an economic catastrophe. This can easily be lost in all the noise about caps, triggers, and super committees, but had government been unable to borrow and pay its bills, it would have both drained $130 billion from the U.S. economy in one month and driven up interest rates.  This mix would have been toxic for a struggling economy.  
2. It did not come remotely close to solving the federal debt problem. It will reduce 2012’s projected $1.3 trillion deficit by about $25 billion, according to the Congressional Budget Office. This is a rounding error.
3. It will do nothing to create jobs, at least not in the short-run. In fact, it is likely to slow the economy slightly. And if either Main Street or Wall Street was looking for fiscal certainty from this agreement, they surely did not get it.  
4. It showed once again how it is not possible to meaningfully reduce long-term deficits by only cutting discretionary programs. These agency budgets account for only one-third of all government spending. If Congress eliminated every single one of these programs (including shutting the Defense Dept., ending food safety inspections, and abandoning the air traffic control system) it would barely balance the budget and shave only about one percent off the national debt.  
5. It will result in painful cuts. While the impact on the overall deficit will be small, some programs—and their beneficiaries—will suffer. It will be up to the congressional appropriations committees to divide up the cuts, and it will be interesting to see what they target: regulatory agencies, safety net programs, or aid to states, for instance. 
6. It made no meaningful spending reductions after 2012, despite the claims of supporters. While the law includes discretionary spending caps through 2021, these mean very little. If the GOP takes over government sometime over the next decade, cuts will be far deeper than outlined in the deficit agreement. If Democrats regain control, spending probably will rise. Even if government remains divided, real spending will be driven more by unpredictable  economic and international events (as well as future changes in public opinion) than by the numbers in this agreement.
7. It proved once again that serious long-term deficit reduction can only come with increases in tax revenues and a slow-down in entitlement spending, especially for health care. This is not an ideological theory. It is a matter of third grade arithmetic (see #4).
8. It kicks tax reform into 2012 and beyond.  Sad but true.
9. It once again showed the consequences of ideologues refusing to take yes for an answer. The Republican leadership had maneuvered a Democratic president into proposing $4 trillion in deficit reduction, including changes in Medicare and Social Security. But the party’s rejectionists couldn’t bring themselves to take the deal.  The GOP cares far more about low taxes than balanced budgets. 
10. It will not end the agonizing fiscal debate. We will now spend the next six months obsessing over the newly-created fiscal  committee and what will happen to its recommendations (if it can make any). Obama thinks he can pivot to talking about jobs. I wish him luck.