Sunday, February 7, 2010

Geithner Quizzed On U.S. Credit Rating

Treasury Secretary Tim Geithner was asked this morning on ABC's "This Week" whether the U.S. was in danger of losing its AAA credit rating.

Moody's Investors Service recently issued a warning that the government's credit rating could eventually be in jeopardy if nation's finances don't improve.

Geithner responded that the U.S. would "never lose" its top credit rating. In one sense Geithner could be right, in that the Fed can simply print up money to pay off any debt. This would be highly inflationary, of course, but it could be done.

It is noteworthy, though, that this question is being asked on mainstream television. The government debt is a problem, but is the new mainstream focus on the debt a set up to justify higher taxes?

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