Timothy Franz Geithner (pronounced /ˈɡaɪtnər/; born August 18, 1961) is an American economist, banker, and civil servant. He is the 75th and current United States Secretary of the Treasury, serving under President Barack Obama. He was previously the president of the Federal Reserve Bank of New York.
Geithner's position includes a large role in directing the Federal Government's spending on the financial crisis of 2007–2010, including allocation of $350 billion of funds from the Troubled Asset Relief Program (TARP) enacted during the previous administration. At the end of his first year in office, he continued to deal with multiple high visibility issues, including administration efforts to restructure the regulation of the nation's financial system, attempts to spur recovery of both the mortgage market and the automobile industry, demands for protectionism, President Obama's tax changes, and negotiations with foreign governments on approaches to worldwide financial issues.
Michael S. Rozeff
January 10, 2011
The U.S. government is insolvent. Who says so? Timothy F. Geithner, the U.S. Secretary of the Treasury.
Geithner sent a letter to Congress on Jan. 6, 2011 asking for the debt limit to be raised. If it is not raised, he warned, the U.S. will default on its debt. In his words:
Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States.”
He didn’t say that the government will be inconvenienced. He didn’t say that the government would be forced to muddle through by delaying payments, raising taxes, and cutting non-obligatory programs and services. He said the government will default. This means that the government doesn’t have enough cash to pay its obligations to the many and sundry persons to whom it owes cash unless Congress authorizes an issue of even more debt.
After the government issues the new debt, its overall debt will be even higher than before. Unless its obligations that require cash payments are reduced, or unless it finds new sources of revenue, or unless the interest rates that it pays decline, the same situation will surely occur again and occur even faster because its overall debt will have risen. It will run short of cash to pay its obligations.
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Timothy Geitner (Secretary of the US Treasury) writes Harry Reid (Senate Majority Leader) telling him we need more on the credit card or the US will default on it's loans. January 6. 2011 http://www.treasury.gov/connect/blog/....
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