Obama and the Democrats are all geeked up about this Gang Of Six thing.

Of course they are. The Gang Of Six don’t have a plan. They have a plan to have a plan. There are no specifics on spending cuts, it won’t be ready in time for that August 2nd deadline…and, shockingly enough, the economic experts who have taken a look at what’s actually on paper out of the Gang Of Six say it’s a joke.

Naturally, that’s the kind of plan Obama can get behind.

The experts…

Credit Suisse: Overall, we think the market has overreacted to the Gang of Six Plan, and do not think it will become a meaningful part of the current debt limit negotiations. It may keep the rating agencies at bay for a while, but at some point there needs to be some substantive action.

Jim Vogel, FTN Financial: From the tone of last Thursday’s political analysis from S&P, however, we’re skeptical the Gang of 6 plan would avoid a downgrade for the US. S&P has to be convinced a plan will actually work with bipartisan support. Just passing the debt ceiling doesn’t count.

BNP Paribas: Press reports following the U.S. market close pour cold water on the prospect that a downgrade could be averted; with a few key senators quoted saying the plan would not be drafted and scored by the CBO in time to be part of legislation to increase the debt limit. Our US team says if the US does not raise the debt ceiling by Aug 2nd and pass a package in the neighbourhood of $4 trn in deficit reductions over 10 years, there is a 50-50% chance that S&P will downgrade the U.S. long-term credit rating from AAA to AA+ within 90 days- so perhaps the problem could persist in the days ahead still.

Bill O’Donnell, UBS: Reuters writes about how nervous investors are racing into cash and another article discusses how the Gang of Six plan has many elements that have been rejected in the past. This time though, sweeteners have been added to incentivize the nay-sayers into approving those unpalatable parts of the scheme.

David Ader, CRT Capital: Alas, no sooner had bonds and stocks voted into the close then analysts and journalists soberly pointed out that the plan could hardly go through in time. Obstacles include politicians wishing to tinker with the admittedly vague details, indeed details so vague that apparently the CBO couldn’t give proper evaluation, i.e. scoring, in time nor legislatures translate it into legalese in time. Stuff like that.

Bricklin Dwyer, BNP Paribas: A downgrade by S&P looks increasingly imminent regardless as the Gang’s plan is simply not credible and even on the best hope would fall short of the stated USD 4.0 [trillion] of credible deficit reduction needed to avoid a downgrade … The Gang’s plan includes a two-step legislative process. The first step includes a pathetic USD 500bn down payment which would impose statutory discretionary spending caps through 2015, a shift to the chain-weighted CPI inflation measure, and a Congressional pay freeze. The second step would include a slew of savings which would need to be “found”. While there is currently no linkage between the Gang’s plan and raising the debt ceiling, it will likely be tied to a dollar-for-dollar increase—it is just unclear on which metric (USD 3.7trn, USD 1.5trn, or USD 500bn) they will base the increase. Congress is not serious about deficit reduction. In the end, this will come at the cost of a downgrade to the US sovereign rating.-