Saturday, August 8, 2009

Geithner Asks Congress to Increase Federal Debt Limit

Paging China. We will have more securities for you.

On Friday, Treasury Secretary Timothy Geithner asked Congress to increase the $12.1 trillion debt limit, saying it is "critically important" that they act in the next two months.

Geithner, in a letter to Congress said that the Treasury projects that the current debt limit could be reached as early as mid-October. In an Alice in Wonderland moment, Geithner wrote that increasing the limit is important to instilling confidence in global investors.

"It is critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations," Geithner said.

Actually, what global investors would like to see is the U.S. get its financial house in order, which means less government spending and less government debt, i.e., the Swiss model, not the Zimbabwe model.

Geithner did not specify an amount by which he wanted the debt limit to be raised.

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