Is Geithner really that dumb?

Timothy Geithner is either really stupid or he’s simply lying to buy time.  I left work early today and I heard this quote from Rush Limbaugh on the way home (I used to listen to him regularly, but his shtick is getting old – how long can he blame everything on the Democrats and Clinton?  Bush had power for 8 years, and borrowed as much money as ALL previous presidents combined – I didn’t hear Rush bitching about spending then.)  so I had to look it up.

Rush is right on this one – here’s a quote from a Bloomberg news story: It will be helpful if Geithner can show us some arithmetic,” he said.

“He” is Yu Yongding, a senior researcher at the government-backed Chinese Academy of Social Sciences and a former central bank adviser. “The Chinese public is worried about the safety of its foreign- exchange reserves,” Yu said in an e-mail.

Yup, that would sure be “helpful”.  I’m still trying to figure out how we (the US) can borrow as much as we collect in taxes this year and next year and still Geithner can state “No one is going to be more concerned about future deficits than we are”. I’d like to see the math on that.

To put it bluntly, Geithner is either really, really dumb, or he’s simply lying. I think he’s lying.

According to a Reuters story about the visit A major goal of Geithner’s maiden visit to China as Treasury chief is to allay concerns that Washington’s bulging budget deficit and ultra-loose monetary policy will fan inflation, undermining both the dollar and U.S. bonds.

That sounds good – I too would like to be reassured that my savings aren’t going to be worthless because of the incredible amount of money being printed.  But guess what?  Words mean nothing – it’s what they actually do that counts.  And what the Obama administration is doing is driving the final nails into the coffin that is the US economy.  Bush dug the hole, and Obama is pushing us into it.

The really sad part of Geithner’s statements is that even the Chinese know that he’s lying.  According to the same Reuters story when Geithner said “Chinese assets are very safe,” it  drew loud laughter from his student audience, reflecting skepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.

Towards the end of the Bloomberg story, it says “I will, of course, make it clear that we are committed to a strong dollar, that we are committed to bringing our fiscal deficits down over the medium term to a sustainable place, to a sustainable level,” Geithner said in the briefing May 27. “We believe in a strong dollar. A strong dollar is in the U.S. interest.”

That’s pure bullshit and I think Geithner knows it.  He can’t really be that stupid.  No deficit is “sustainable” over the long run – every year simply puts you further and further behind.  At some point you must pay the debt off.  And in order to pay ANY debt off you must have a surplus.  That’s simply not in the cards for the US.  Medicare and Social Security are soon to run huge deficits – and where will we get the money to pay that?

gk

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