Timothy Geithner 4/19/2011: No Risk U.S. Will Lose AAA Rating

Something tells me that the Treasury Secretary will be asked about this in the coming days:

FILED UNDER: Deficit and Debt, Economics and Business, Quick Takes, US Politics,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020.

Comments

  1. john personna says:

    There’s nothing wrong with expressing confidence 😉

    (actually, for him it is a job requirement)

  2. Chad S says:

    Considering that the S&P made a mistake in their math(and refused to reconsider their decision) along with Fitch/Moody’s keeping the AAA rating, I don’t see what the controversy is.

  3. john personna says:

    @Chad S:

    While S&P has the right to assign any rating they want, you certainly have the right to reject their analysis, and Geithner has the right to “express confidence” that they are wrong.

    But let me explain why the downgrade doesn’t bother me, personally.

    First, AA+ is not a low rating. It is Investment Grade and has the shorthand meaning of “Very strong capacity to meet financial commitments.” The downgrade is only from “extremely strong” to “very strong.” We are nowhere near “risky” or “junk.”

    Second, the rationale that S&P offers is something I can relate to:

    We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

    I think that’s actually a paragraph that many OTB columnists can buy into.

    The question should be whether that paragraph maps to “extremely strong capacity to meet financial commitments” anymore. Or whether we’ve slipped a bit.

    I say heck yeah, and I hope this puts a fire under Washington to do a real fix, before other ratings agencies follow suit.

  4. Tsar Nicholas II says:

    Can you fathom the reaction among liberal idiots on the Internet and on university campuses if a Republican administration was this numbingly incompetent?! Yikes.

    In any event, among Geithner, Holder and Napolitano it’s truly a race to the bottom for the worst cabinet official in history. It’s like watching Peter Sellers play a Keystone Kop after smoking crack. But much worse, of course, since Team Rambobama has vast powers in real life. Scary.

  5. john personna says:

    @Tsar Nicholas II:

    Can you fathom the reaction among liberal idiots on the Internet and on university campuses if a Republican administration was this numbingly incompetent?! Yikes.

    The amazing thing to me is that we pass Boehner’s debt plan, more or less, and now it’s Obama’s downgrade.

    The Tea Parties are children. “You let me do it, so now it’s your fault.”

  6. Neil Hudelson says:

    You let me do it, so now it’s your fault.

    That pretty much summarizes the current Republican party’s SOP.

    And Tsar has bought into hook, line, and sinker.

  7. Tom says:

    S&P said that Congress must pass at least $4 trillion in “cuts” over 10 years. The President doesn’t offer a plan, he ignores his own created bipartisan debt Commission, the Democrats block spending “cuts” tooth and nail, and will only concede to only a little over $2 trillion “cuts”. The Democrats are clearly a dysfunctional party and deserve the entire blame for the down grading. The funny thing is that while Democrats talk about the end of the republic as we know it because of the spending “cuts”, the truth is that spending will keep increasing every year and the so called “cuts” are only a reduction in the rate of increase in spending. With $63 trillion in unfunded liabilities owed by the federal government, there is no way in hell that this can problem can be solved with tax increases. Spending will have to be cut, and I mean real cuts, to solve the debt problem. The Tea Party are the only grownups in the room trying to solve the debt problem, while the Democrats stick their heads in the sand, ignore the problem hoping it will go away, and use incendiary language like calling the Tea Party “terrorists”.

  8. An Interested Party says:

    The Tea Party are the only grownups in the room trying to solve the debt problem…

    Yes, pushing spending cuts alone with no tax increases is just so “grownup”…

    while the Democrats…use incendiary language like calling the Tea Party “terrorists”.

    The Democrats were merely confused….the Tea Party crowd aren’t terrorists, but, rather, extortionists…