Geithner pressuring Republicans to raise debt limit

U.S. Treasury Secretary Tim Geithner, is making a fuss today because he is putting pressure on Republican lawmakers to raise the limits on the country's $14 trillion national debt, cautioning that if no action is taken, it would lead to another economic collapse.

Geithner apparently wrote a letter to Senate Majority Leader Harry Reid which stated that the United States might hit the debt ceiling level allowed by March 31st; his suggestion to the newly Republican controlled House of Representatives is to raise the level to avoid pushing the United States into default.

Already the bickering has started. House Speaker John Boehner released a statement that said:
"The American people will not stand for such an increase unless it is accompanied by meaningful action by the president and Congress to cut spending and end the job-killing spending binge in Washington."

Republicans primary argument is to not default, but not continue to borrow recklessly, while Geithner believes if no action is taken, the United States will begin to default on its obligations and would no longer be in a position to make interest payments, which alone total $21 billion a month for this fiscal year. He thinks that this would lead to something much more catastrophic than what was seen in 2008 and 2009.

Nonetheless, foreign lenders including China and Japan have voiced their concerns, especially seeing the financial turmoil in countries like Greece and Ireland. Those countries couldn't meet their obligations and eventually had to be bailed out. Something that Geithner is seeking to avoid again.

Seems like his primary focus is to continue to spend money so that you have revenues taken to support the debt obligations. Either way you look at it, the situation appears grim. You've got one party that wants to spend and borrow, and one party that wants to cut spending across the board.

Yet, isn't it interesting that for the last two years, Secretary Geithner has made little to no comment whatsoever about the impacts of our growing national debt, until just now?

Definition of U.S. Treasury Secretary: a Weasel

The Treasury Secretary Tim Geithner is supposed to an experienced economist that has the fiduciary duty and responsibility to oversee the U.S. Treasury. Yet when economists and financial and hedge fund managers of major banking and investment groups and corporations continue to discuss the notion of the U.S. dollar weakening, Secretary Geithner continues to say this is not the case, yet he never seems to offer any evidence to support his defense.

Alan Greenspan, the former Federal Reserve Chairman, earlier this week claimed “the United States is deliberately weakening the dollar”, challenging Geithner’s responsibility over the Federal Reserve and how it establishes monetary and fiscal policy with relation to currency supply and interest rates. Geithner’s response was that “the U.S. will never do that. We will never seek to weaken our currency as a tool to gain competitive advantage to grow our economy”.

Of course not.

Geithner would simply like every one else in the world to manipulate their own currency, most notably China, which has a reputation for doing so, to solve our monetary problems. At the same time, China does not want to devalue its currency, because it would mean exporting jobs from China, back into the United States. China, which for the most part, owns the United States’ $14 trillion and growing national debt, is really focused on what the Federal Reserve’s inability to control its monetary supply without leading to further inflation, and now critics are actually thinking it might become a deflation of the U.S. dollar.

Yet, in nearly every Congressional testimony that Secretary Geithner has given, he says that the economy is growing within the private sector, despite the unemployment remaining about 9% and most likely projected to remain the same into 2011. He also made a push earlier this week to print $600 billion dollar out of nowhere, which already has foreign critics (again China) up in arms about our federal policies, which was cited by some members of Congress and economists as being another bad decision.

One has to question the motives behind printing all of this currency. The idea for doing so seems to improve the U.S. economy, but has deemed unworkable thus far. Is Secretary Geithner just doing so to make the economy look good, without any notion of thought in regards to inflation? What message are we sending to our foreign lenders over seas? Can the U.S. even continue as a place to do business in the coming years?

I will be the first to admit that I am not an economist by any means, but it does not take rocket science to figure out that Secretary Geithner is clearly continuing to act as a puppet for this Administration, standing around acting as if everything is fine and dandy. This is the same Treasury Secretary who dodged paying taxes and was President of the Federal Reserve Bank in New York during the last few years of the Bush Administration. He has the understanding of the Federal Reserve’s policy, and had full knowledge of the impending problems during the financial crisis, and played a role in bailing out AIG.

Now when you hear him testify before Congress, he acts as though he doesn’t even know what happened during that period and incites wrath in everyone else for his contributing audacity. It is quite incompetent.

I would recommend that someone make an amendment to the definition of what the Treasury Secretary is supposed to be. As far as I’m concerned, its description is... a weasel.