Geithner dreams more and more money-print...
Timothy Geithner started the betting on the new political poker, named CR-2 (ceiling rise - 2 round). After the government calculated that the current ceiling will be reached this year, the Congress combinations started for a new increasing of the limit of money the government can borrow. So playing the demagogue, the Treasury Secretary advised lawmakers this time not to make a scandal from the case, but to pass the needed legislation quietly and wisely. Mr Geithner blamed last year scandal in Congress for damaging the confidence in USA and destabilizing the economy.
This is a very vile tactics as it suggests that the theme is not disputable and
with or without debates the ceiling will be changed again. Geithner is trying
to persuade us that the problem is not the debt as itself, but the discussions
on it. This is a very dishonest manipulation, that in fact can be more damaging
for the US image, than the Congress discussions.
In fact the main problem is the debt itself. When reaching the ceiling this
year, Obama will have more debt than is the entire GDP of United States. The
same situation in Europe is bringing governments to a default. With another rise
in ceiling USA will go closer to the most problematic European countries like
Greece and Italy.
So in fact the debt is the problem and not the discussion on the debt. USA is
very close to a financial disaster with 40% of budget taken as loans and more
that 70% of these loans, given by FED with a money print mechanism. So the discussion
on this danger is important, although too much republicans are socialist-minded
and do not defend a real wise and responsible position on the debt management.
But this year is some different that 2011. It is a year of both President and
Congress elections. So I think the decision on the debt and ceiling issues must
be taken by American people. I think nor the Congress nor the President must
hurry in fundamental decisions. Instead all politicians must make this question
central for the elections. And the voting of people to decide the future of the
same people. Every type of secret decision or even "quiet" decision
(as Geithner hopes) is non-democratic and has no logic in an election year.
When we have an election it is upon it to take the important decisions.
Generally if the people like going in more debt, they have the right to vote
for this. It is them that will repay it back later. If the people like
inflation and money-print they can vote for this. It is about the value of
their dollars and salaries. But if the people do not like all this, they also
have the right to vote - in favor of something different.
My own sensation is that the people very well understand that not the
discussion, but the debt itself is the problem. Something obviously very
difficult to understand for Mr Geithner...