Posted on 04/08/2012 11:26:25 AM PDT by John Semmens
Treasury Secretary Timothy Geithner argued against letting fears of ballooning federal government deficits interfere with increased government spending.
“The federal government’s debt and deficit are no big deal,” Geithner insisted. “It’s not like personal or corporate debt or fiscal shortfalls. It can be canceled at any time. Look, the government makes the laws. It can easily make a law absolving itself from the responsibility to repay borrowed money if it has to.”
Geithner hastened to clarify that he was “not advocating such a law at this time, but the power is there if we need it. I don’t think we will need it because the Federal Reserve has the authority to create as much money as it wants to. We owe $16 trillion. The Fed can create $16 trillion—problem solved.”
A bigger worry as Geithner sees it is that “government won’t have sufficient funds to invest if we don’t provide more stimulus spending. A key to sustaining support for the Administration is a generous supply of cash to distribute ahead of the November balloting. As Franklin Roosevelt demonstrated in winning three reelection campaigns, getting money into the right hands helps secure the votes the incumbent needs to retain his office.”
Left-wing economist Paul Krugman backed Geithner’s stance saying that “maintaining the flow of cash from the government is crucial. Congress should appropriate the funds and not worry about where the money will come from. In turn, the Fed should create as much new money as is needed to fund these outlays and not concern itself with the inflationary consequences. In fact, inflation works to the government’s benefit by allowing it to repay debt with cheaper dollars.”
if you missed any of this week's other semi-news posts you can find them at...
http://azconservative.org/2012/04/07/president-claims-court-ruling-against-health-care-law-would-be-unprecedented/
Does that even make sense?
Sounds like the Liberal version of hot-mic economic strategy after the election; default on sovereign debt, and tell the world that it's okay. I can understand Obama getting through school on Affirmative Action A's and not learning anything, but what is Turbo Tax Timmy's excuse?
“It can be canceled at any time.”
And never be able to borrow again.
From the perspective of a gold bug, these comments are great news. For people predicting significant inflation, these comments are vindication. For the enemies of America, these comments are heartening since they’re an indicator that we are closing on the end times of our being a great power. A third world mentality has taken over our country.
From the perspective of a gold bug, these comments are great news. For people predicting significant inflation, these comments are vindication. For the enemies of America, these comments are heartening since they’re an indicator that we are closing on the end times of our being a great power. A third world mentality has taken over our country.
No it does not make any sense.
WHy would you expect leftists to make sense?
What a deal! We are saved!!
Surely this means we won't have to pay those taxes anymore either. We can all just "create" our own laws!
took me two pargraphs to realize it was Semmens. Got me.
LOL, John. I always check to see if it’s YOU, so my BP doesn’t go thru the roof! Good one.
I mean, Caaahhh MON! ... Where's your sense of adventure ?
Geithner for President!!!
Meh! Didn’t make it past the title.
LOL
Happy Easter.
“It can be canceled at any time.”D'accord.And never be able to borrow again.
But take it a bit further. Who in his right mind would buy any long term US government debt TODAY after hearing the Treasury Secretary announce just how perishable such an asset has become under the Obama administration.
This is not just hypothetical rambling on Geithner's part.
Consider how the Obama administration has already, effectively by fiat, stuck it to the so-called "secured" bond holders of the car manufacturers. Long standing principles about the priority of secured paper, even in bankruptcy, have been reversed in the interest of the unions.
Everybody check your portfolios to see if you are holding any such paper.
Thanks Clintonfatigued.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.