WC Varones

Don't lend your hand to raise no flag atop no ship of fools

Little Timmy Geithner says he can single-handedly turn back the tide of trillion-dollar deficits and endless Fed monetization

Come on now. Even Timmy's mommy has to be embarrassed by statements like this:
The Treasury is steadfastly committed to a strong dollar, Mr. Geithner said. The U.S. will never debase its currency under his watch, he said.

I've got news for you, Timmy. Debasing the currency is exactly what Congress, the Administration, and the Federal Reserve have been doing the past 2+ years while you've been playing Mr. Super Important Treasury Secretary. And they didn't ask your permission.

UPDATE: It looks like the Wall Street Journal has memory-holed the whole story by Bradley Davis and replaced it with a story by Damian Palletta and Janet Hook that omits the Super Timmy statement. Free Republic and others linked the original story too. Here it is as captured by blogger lillierm:

Geithner: Debt-Ceiling Debate Is 'Irresponsible'


April 26th, 18:36

NEW YORK—New headwinds—most notably oil prices—confront the U.S. march to recovery, U.S. Treasury Secretary Timothy Geithner said Tuesday.

Unemployment, long a weak spot in the economy, remains "very high," and the economy feels "unfairly hard" to most Americans, Mr. Geithner said in comments that weighed on the dollar. He said oil prices at current levels, while challenging, weren't at levels that threaten to derail the recovery.

First, though, U.S. lawmakers must agree to increase the debt limit, something some politicians have said they will not do unless there is broad agreement on massive cuts to a bloated federal budget.

The U.S. has "unsustainable" budget deficits and the country faces no alternative but to cut, Mr. Geithner said to an audience at the Council on Foreign Relations. Political consensus has come around to this view, the Treasury secretary said, and despite some discussion to the contrary, politicians will agree to raise the debt cap, he said.

The debate on whether or not to increase the debt limit is "ridiculous" and "irresponsible," Mr. Geithner said.

While talk of a failure to expand the U.S. debt limit has caused some concern that the credit of the nation could be damaged, investors still are confident in the U.S., Mr. Geithner said, as indicated by their flocking to the dollar in times of trouble.

The Treasury is steadfastly committed to a strong dollar, Mr. Geithner said. The U.S. will never debase its currency under his watch, he said.

This "fundamental confidence" in the U.S. depends "a lot," Mr. Geithner said, on the Federal Reserve's controlling of inflation, something he said he was confident the Fed would do.

Lawmakers, also, will play their part in increasing the debt limit, Mr. Geithner said, pegging the end of June as the absolute deadline for approval of the increase.

"Of course they will act," he said.

After that comes the hard part, he said, with deficits needing to be brought down to a sustainable level of 3% of gross domestic product. Rules to enforce budgets to hew to this limit must have teeth, he said.

The "no new taxes" pledge many lawmakers take is "the most difficult" barrier for some to overcome when it comes to crafting a plan to cut spending and increase revenue, Mr. Geithner said.

Whatever reforms are agreed to must be phased in, Mr. Geithner said, saying the U.S. does not find itself in as desperate shape as the U.K., whose leaders have rammed through a series of belt-tightening austerity measures.

Doing the same thing in the U.S. could risk squelching growth, Mr. Geithner said.

The U.S. is far ahead of its global competitors when it comes to reforming its financial system and putting the economy on the path to long-term, sustainable growth, Mr. Geithner said.

Write to Bradley Davis at bradley.davis@dowjones.com

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