Geithner Says Failure to Raise Debt Limit Would Make Recent Financial Crisis Look "Modest..."

[Purveyor]

Source: ABC NEWS

Geithner Says Failure to Raise Debt Limit Would Make Recent Financial Crisis Look "Modest In Comparison"

A government shutdown looms at the end of this week if Congress cannot reach a funding agreement, but lawmakers face an even bigger challenge next month: raising the country’s debt ceiling.

The Obama administration has warned lawmakers that they must raise the country’s current debt limit of $14.29 trillion before May 16 or risk “catastrophic” consequences, according to Treasury Secretary Tim Geithner. In fact, Geithner said Tuesday, the consequences of default would make the recent financial crisis appear “modest in comparison.”

“The consequences of that would be catastrophic to the United States,” Geithner told a Senate Appropriations subcommittee. “Default by the United States would precipitate a crisis worse than the one we just went through. I think it would make the crisis we went through look modest in comparison. It would force us of course to cut critical payments to our seniors and it would be a reckless, irresponsible act to this country. I find it inconceivable that the Congress would not act to increase the limit.”

“If we take no additional actions, we run out of room on May 16,” he noted. “There are a series of measures that my predecessors have used in the past that Congress has authorized that would give Congress a little more time, but those measures don’t buy us nearly as much time as they did in the past because our debt and deficits are so large now. So those would buy us an additional few weeks if Congress doesn’t act. Now of course even resorting to those measures does create some risk of adding to uncertainty in markets so you’d rather not do that, but we will do everything we can to make sure that we meet our obligations and of course encourage Congress to act in a timely manner.”

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Read more: http://blogs.abcnews.com/politicalpunch/2011/04/geithner-says-failure-to-raise-debt-limit-would-make-recent-financial-crisis-look-modest-in-comparis.html

[bemildred]

1. Derp, derp, derp ...

One wonders what he think of large tax increases as a solution to the "deficit".

[Vincardog]

2. Bingo return the top marginal tax rate to pre RAYGUN levels and we can talk about entitlements.

[Moostache]

3. No...fuck THAT!

Not only raise the top marginal rate....that's only the beginning and we don't get NEAR entitlements until a whole lot of other things get addressed first!

1) End the wars - ALL OF THE FUCKING WARS - TONIGHT!!!

2) Cut bait and leave the non-military nation building to the nations themselves.

3) Close Guantanamo and all secret prisons.

4) Eliminate the corporate tax loopholes 100% - if you are here making $, you are paying your taxes or you are getting billed for EVERYTHING - the roads to your plants, the infrastructure and utilities to your HQ, the military that protects the nation and particularly its energy supply. You want to benefit from America's advantages? Fine, we want you to be here and we want you to do ridiculously well too; and contrary to popular propaganda from the right, we do NOT hate businesses. We hate freeloading sons-of-bitches who steal our money and sell off our jobs and ecology and future for increased profits that they then deny to avoid paying taxes on in the first place.

5) Revise and extend Obamacare to become truly Medicare for All and pattern it on other successful national healthcare systems - sorry to the insurance industry, but you are a leach and when the body is starving, allowing the blood suckers to keep taking nutrients is suicide.

We could go on and on and on, but the idea that ONLY increases in the marginal tax rates is enough is not good enough.

[Vincardog]

11. I will go along with all your ideas but, We have to start somewhere

[russspeakeasy]

4. Failure to get rid of Geithner would make the current crisis

look modest.

[Romulox]

5. There hasn't been a crisis like this since the bankster bonuses were threatened!

:eyes:

[nyy1998]

6. I know there's a lot of hate here on DU for Geithner, but most of these attacks here

are on him on his past, and not on the fact, that his main point is correct or not(and he's actually right).

[naaman fletcher]

9. no he's not..

he is just like every friend or relative with a spending problem who keeps borrowing money so that he can restructure. The simple fact is that the only solution to spending more than you make is to stop. It will suck for a year, but we will be better off for it. And yes, stop the wars, and stop wall street from sucking all the money out of the economy, and raise taxes on the rich.... then it won't be as bad.

[nyy1998]

10. No, you're missing his point,it's about the debt ceiling and how not raising it would be problematic

Besides what the hell does Geithner have to do with stopping the wars? Go bitch about that to Clinton or Gates. And his point has nothing to do about Wall Street getting bonuses.

You're proving my point that because you strongly disagree with him in the past, you think he's automatically wrong, even though he's actually right.

[AtheistCrusader]

14. The wars are relevant in that they are a significant percentage of the spending that is pushing us t

o the limit.

Not that Geithner has any control over that aspect.

(He could probably make a recommendation to the President though)

[nyy1998]

15. I'm not disagreeing with that, my point was that Geithner has no real control over that nt

[naaman fletcher]

17. but congress does..

congress can not raise the debt ceiling, and then we solve the problem of adding on more debt. Then we hope we win the battle of what gets cut.

[AtheistCrusader]

18. And Geithner has a voice he can use to berate congress on our behalf.

Maybe political suicide, but there's always 'doing the right thing'.
He might be surprised at the level of support he has from the people in doing it.

Just start off with 'hey guys, I'd like to talk about why we are approaching the debt ceiling.'

[naaman fletcher]

19. yes but he won't,

because he is wall street's errand boy

[naaman fletcher]

16. no, im not missing the point..

the point of raising the debt ceiling is to take on more debt. The only way to stop the debt problem is to stop taking on more debt.

[nyy1998]

21. We're taking on more debt either way, so you basically have a choice of raising the debt ceiling or

make the US dollar mean absolutely nothing. And while several countries are moving away from the US dollar, the collapse of the US dollar would have a HUGE impact on the Global Economy.

So yes, you're still missing the point.

[naaman fletcher]

23. so if it doesn't matter either way..

then don't raise the debt ceiling.

[nyy1998]

27. Really? You're all for crashing the global economy?

[naaman fletcher]

28. BS

Not borrowing money doesn't crash the global economy, its saves it. You sound like every bum i know who just needs to borrow a little more money. The answer to debt is to stop getting into it and then pay it off.

[nyy1998]

34. Nice, so not only do you not prove your case but you call me a bum.

A wonderful and enlightening debate points on your part.:eyes:

Seriously, did you ever take any Economics class?

[AlinPA]

25. My understanding is that if the debt ceiling is not raised at this time, the U.S. would default on

the bonds that have been issued and the world wide markets would go into a collapse, not to mention our own economy.

[naaman fletcher]

29. that...

or we can live within our meany and pay the interest on the existing debt without issuing new debt to do it.

[AlinPA]

31. That's a meritorious goal, but default would occur instantly. The world would react instantly with

catastrophic results to the financial markets - that's what Geithner is talking about.

[naaman fletcher]

33. it's going to happen..

it's just a matter of when.. the further it is kicked down the line the worse it will be.

[AlinPA]

35. Good point, but we shouldn't push it to happen.

[Enthusiast]

24. On this issue, at least, Geither

is correct. Unfortunately Geithner has damaged his credibility with many of us.

[nyy1998]

7. Edit: Duplicate post

[taught_me_patience]

8. Translation: My banker buddies won't make their bonuses

so please raise the limit.

[Renew Deal]

12. It's a little worse than that.

Think Argentina or Iceland, only preventable.

[taught_me_patience]

26. Yeah he's right

the consequences will be severe... but his motives are probably completely misplaced. Not raising the debt ceiling would be a complete disaster for our economy.

[JJW]

13. Ask Bernie Madoff

Ya got to feed the ponzi scheme.

[Demeter]

20. Geithner the Mastermind Doesn't Want His Plans for World Domination Stopped

That's what this really is.

The time to prevent this train wreck is now. Dump Geithner; dump Obama if he won't dump Geithner. Stop the wars, tax the rich, stop all the corporate giveaways and welfare and tax loopholes. Rebuild the base of this nation: the rule of law, the Magna Carta, the manufacturing; and put finance on a tight budget to squeeze out the crooked.

[golfguru]

22. Geithner is part of the problem

He has allowed the government to go where it is now borrowing 42 cents
for every dollar spent. Does he really think we can keep borrowing like
that?

[BR_Parkway]

30. Hmm, would it be so terrible to let it all crash and start over? I'll probably

be pickled and skewered for thinking like that - but we've seen the results of quickly allowing the monied class have their return to wealth and how they've been using it to beat back all the regulations that would have made sense, how they've used it to keep us from getting a single payer health care system, keep the wars running and provide endless tax breaks for themselves and their friends.

What if it all crashed and their money was just as worthless as ours? Take over the banks, void out all the mortgages - then start rebuilding a financial system for the people rather than the bankers. With enough anger to keep the public awake enough to make sure the reforms got passed, that the media giants got split up enough to not propagandize us with every report, start a single payer system to take the place of the defunct insurance companies - and create a memorial out of Wall St so that the people never forget again what a danger they are to our democracy.

[Yo_Mama]

32. Nothing would make the recent financial crisis look modest

And it is still with us.

I really don't like this guy.