President Obama puts the finishing touches on his speech Tuesday. (Official White House Photo by Pete Souza)

When the debt-ceiling crisis of 2011 finally became history, most Americans were extremely relieved to know that the United States would not have to default on its obligations. The armed forces at home and abroad, veterans, the poor, the disabled, the elderly and the millions of Americans on the federal payroll or contracted by the government will continue to receive their checks at least until the end of 2012.

Some of the other short-term winners are recipients of Social Security and Medicaid (but not Medicare); people who don’t want any change in the tax code; people who don’t think we should be the world’s policeman or expand the American Empire (the defense budget will take a big hit). President Obama and Democrats seeking re-election are the biggest winners. They will not have to defend a vote to raise the debt ceiling again before Election Day. This was, in fact, the major concession won by the Democrats.

Among the losers, the once-sacrosanct Department of Defense will be humbled: the Pentagon will sustain $350 billion in immediate cuts and a possible $600 billion more over the next 10 years. Infrastructure, research, clean energy, education — these are certainly losers. There will be little support for them. The jobless will lose extended unemployment benefits — $60 billion — as of Jan. 1.

The economy may be a loser as well, despite Moody’s announcement Tuesday that it would not downgrade the AAA credit rating of the United States. Keep in mind that the result of all the scheduled cuts is much less spending and investing in an already weak economy. The public sector lost 39,000 jobs in June alone. So far this year, almost 100,000 employees in local government have lost their jobs because of spending cuts. The cuts yet to be enacted as a result of the debt-ceiling deal will add still more people to the ranks of the unemployed. How will that reduce the deficit?

Our biggest problem is unemployment, not the public debt. A strong work force would make a big dent in the deficit. Far from attempting to solve the unemployment problem, the debt agreement exacerbates it. The economic recovery is faltering now because there isn’t enough consumer demand. Yet the debt-ceiling deal will result in still less demand as the government is forced to cut jobs and fire contractors. Demand previously created by government spending will wither away, and government liability will increase in the form of unemployment insurance, food stamps, etc. Added to the negative balance is the forfeited tax revenue that would have been collected if workers had not lost their jobs. Consequently, spending cuts may turn out to be counterproductive if they increase rather than reduce the deficit. Cynics say that Republicans may actually welcome a deeper and more prolonged recession because continued joblessness and a limping economy would work against the Democrats — and Obama in particular — in the next election.

No one is happy. The Tea Party isn’t satisfied with the savings projected by spending cuts they deem to be insufficient. Democrats bemoan the lack of revenue. As we know, in a compromise nobody gets what he wants. The best one can say is that the nation avoided default.

But what does that mean? When was the good faith and credit of the United States ever placed in doubt before? A domestic, self-inflicted crisis has eroded international faith in the dollar and tarnished America’s image.

The biggest loser, then, is American democracy. If there was any doubt before, now there is no question that the checks and balances written into the Constitution have been circumvented, rendering the legislative branch all but dysfunctional. The filibuster has a colorful history. Intended to protect the minority, its abuse makes a mockery of majority rule. In the last decade, the frequency of its use has soared. Now practically nothing can be passed in the Senate without a super-majority, rather than the simple majority dictated by the Constitution. The resolution of the debt-ceiling crisis set a precedent. From now on, the debt ceiling will be tied to spending cuts. A minority can coerce the majority into accepting its demands.

Grover Norquist, arguably one of the most powerful men in Washington (any Republican running for office must sign his no-new-tax pledge), said Monday:

[T]here is a new rule in town. The Boehner Rule: Any increase in the debt ceiling will require a reduction in federal spending by the same amount of the debt ceiling increase.

Senate Minority Leader Mitch McConnell confirmed that Monday:

McConnell promised that in the future the debt ceiling will be held hostage to Republican priorities:

[The debt ceiling debate] set the template for the future. In the future, Neil, no president—in the near future, maybe in the distant future—is going to be able to get the debt ceiling increased without a re-ignition of the same discussion of how do we cut spending and get America headed in the right direction. I expect the next president, whoever that is, is going to be asking us to raise the debt ceiling again in 2013, so we’ll be doing it all over.

When Somali pirates held Americans hostage two years ago in anticipation of receiving a grand ransom, the president countered with a swift, clean strike. Two years ago he knew better than to negotiate with terrorists for fear of emboldening them.