Wednesday, April 6, 2011

He Wants to Take You Higher, Higher

It's not a very flattering picture of Treasury Secretary Tim Geithner, who must be channeling Sly Stone.  But Noman is not in a flattering mood.
"Speaker Boehner has been perfectly clear: The American people will not tolerate an increase in the debt ceiling without serious spending cuts and real reforms to make sure we keep cutting spending," said Michael Steel, a spokesman for Speaker of the House John Boehner (R., Ohio).
The White House and many Democrats have said the debt-ceiling deliberations should be handled separately from any broader debate about federal spending, in part because U.S. debt includes interest on money the government has already spent and is akin to paying interest on an existing credit-card balance.
"It is critical that Congress act to increase the debt limit so that the full faith and credit of the United States is protected," Mr. Geithner wrote in his letter Monday.
Federal Reserve Chairman Ben Bernanke has said the consequences would be "catastrophic" if the ceiling isn't raised and the U.S. defaulted on its debt. Mr. Geithner said in his letter such an action would be "unthinkable."

Noman merely wishes to point out that the only impediment to agreement on this matter is conflicting priorities.  Presumably, Secretary Geithner and Fed Chief Bernanke are addressing their remarks to both parties.  Why does it sound as if they're hectoring Republicans into compliance with Democrats preferences.  The Democrats position is that the debt ceiling must be raised--no questions asked--because US debt includes interest payments on money already spent.  Under their rationale, a consumer addicted to purchasing on credit should always have the limit raised on his credit card because the consequences of his running into it would be unthinkable.  He might not be able to pay his debts, so give him leeway to assume more of them.  Perhaps in the future, Secretary Geithner and Chairman Bernanke might consider the Republicans position, and lecture Congress about the need to cut spending so as to avoid the catastrophic consequences they warn of.

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