The S&P’s downgrade of America’s credit rating has caused those on the left and right to immediately lambast the debt limit deal reached last week for insufficiently tackling the nation’s debt (side bar: S&P warned weeks ago that even in the event that a deal was reached, it would still want to dole out a slap on the wrist of the country’s credit rating. Moreover, the downgrade was based on $2 trillion amateur error that greatly distorted the baseline S&P used. Also, these same credit rating agencies that are now supposedly unquestionably intuitive offered gold-plated ratings to the firms that proliferated the subprime mess and resulting financial crisis in 2008. Food for thought for those of you hysterically fashioning tin foil hats or shoveling your life savings under your mattress).

What has been overlooked is the significance of the spending caps enacted in the debt limit deal. The government has not been subject to spending limits since 2002, and the resulting ten years of budget-busting spending should indicate even to the most skeptical that statutory caps are a true step in the right direction.

The Budget Control Act of 2011 achieves $917 billion in savings by immediate spending cuts and capping discretionary spending for the next ten years. The spending cap defines a maximum dollar amount in spending, anchoring spending within an approximate range. The spending ceiling is still high, but represents an 8 percent decrease in discretionary spending over the next 10 years. Tethering future federal spending to law with some minor reductions provides the first step in reducing Obama’s 84 percent increase in non-defense discretionary spending.

The value of spending caps cannot be understated. The Center for Fiscal Accountability explores further spending caps’ potential impact in its Cost of Government Day study. However, the numbers are illustrative of just how important inserting spending caps into the final debt deal is: capping spending according to economic growth ensures that government spending growth cannot outpace the economy to place a larger a debt burden on Americans. The growth cap would have saved almost $4.1 trillion if in place between 2001 and 2010.

A spending cap chained to the Consumer Price Index (CPI), a calculation of the changes in the prices of commonly purchased goods over time, would have saved over $6.6 trillion over the last decade and the nation would have run a $871 billion budget surplus.

Restraints ensure that politicians cannot elope on spending binges, like what has been witnessed over the past ten years. If all projected federal spending was subjected to a 2 percent growth cap per year, and not just discretionary spending, $4.6 trillion would be saved over CBO’s January baseline and federal spending as a percentage of the economy would fall from 24 percent in 2011 to 19 percent by 2021. This is two percent below historical spending averages – for a President who envisioned 23 percent average spending over the next ten years to fuel his big government agenda, this is unquestionable progress.