Calls for Geithner resignation in wake of credit downgrade

Obama Budget Deficit 2011
Obama Budget Deficit 2011

First, some details about the recent downgrade of America’s credit rating by Standard & Poor’s.

Excerpt:

Standard & Poor’s announced Friday night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.

Lowering the nation’s rating to one notch below AAA, the credit rating company said “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” It said the bipartisan agreement reached this week to find at least $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would not be likely to achieve more savings in the future.

[…]The downgrade to AA+ will push the global financial markets into uncharted territory after a volatile week fueled by concerns over a worsening debt crisis in Europe and a faltering economy in the United States.The AAA rating has made the U.S. Treasury bond one of the world’s safest investments — and has helped the nation borrow at extraordinarily cheap rates to finance its government operations, including two wars and an expensive social safety net for retirees.

Treasury bonds have also been a stalwart of stability amid the economic upheaval of the past few years. The nation has had a AAA rating for 70 years.

Analysts say that, over time, the downgrade could push up borrowing costs for the U.S. government, costing taxpayers tens of billions of dollars a year. It could also drive up interest rates for consumers and companies seeking mortgages, credit cards and business loans.

A downgrade could also have a cascading series of effects on states and localities, including nearly all of those in the Washington metro area. These governments could lose their AAA credit ratings as well, potentially raising the cost of borrowing for schools, roads and parks.

Jim Demint responds by calling for Tim Geithner’s resignation.

Excerpt:

Sen. Jim DeMint (R-S.C.) responded to the nation’s downgrade at the hands of Standard & Poor’s by calling for the resignation of Treasury Secretary Timothy Geithner.

Saying “enough is enough,” the Tea Party favorite pressured President Obama to remove his top economic official and adopt a new perspective.

“The President should demand that Secretary Geithner resign and immediately replace him with someone who will help Washington focus on balancing our budget and allowing the private sector to create jobs,” he said in a statement. “For months he opposed all efforts to reduce the debt in return for a debt ceiling increase. His opposition to serious spending and debt reforms has been reckless and now the American people will pay the price.”

After S&P put the nation’s rating on negative watch back in April, Geithner said there was “no risk” the US would be downgraded.

“No risk of that, no risk,” he said at the time in an interview with Fox Business Network.

Yes, there is no risk the same way that the 864 billion stimulus was supposed to keep unemployment below 8% – except that unemployment shot up over 10%.

I saw this status update from a friend on Facebook:

If you don’t understand the current financial crisis in our country, here’s a simplified explanation: “If the US Government was a family, they would be making $58,000 a year, they spend $75,000 a year, & have $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget & debt, reduced to a level that we can understand.” – Dave Ramsey

The Obama administration has had three one-and-a-half trillion dollar deficits in a row. That is nearly TEN TIMES the last Republican budget deficit in 2007. That was the last year that the Republicans held the House and Senate. The last year before Nancy Pelosi and Harry Reid came into power.

2 thoughts on “Calls for Geithner resignation in wake of credit downgrade”

  1. If you’re talking about TARP – the bailout package that Bush Jr signed in to law, it wasn’t to create jobs, it was to stop the financial meltdown that was starting – nothing more.

    You also keep forgetting the Bush approved all of the budgets including the first one of Obama’s term. You also seem to forget that a huge portion of our spending is required for the wars that Bush started and for the enormous military that Reagan and Bush Sr started (more Reagan with his desire for a 600 ship navy and all that goes along with it).

    Now for the deficits – why is it that the far right doesn’t care that many corporations don’t pay taxes or don’t pay taxes in proportion to a human yet want corporations afforded the rights of a human while criticising the poor for not paying taxes? You don’t see anything even remotely hipocritical about that? The far right supports corporate welfare and corporate tax cuts while bemoaning anything for the middle class all the while ignoring the national debt while republican presidents are in power and crying revolution while democrats are in…odd in my opinion

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  2. This is what the America gets when the GOP dances with the Devil — I mean the Democrat. I’m sorry, does someone think Geithner is working alone on his own agenda? Don’t get me wrong, Jim Demint is right, but this is typical of dictatorships, where only the lacqueys take the fall. 2012 can’t come soon enough, I must say though that my favourite part of the whole deal was the craftiness of working the Bush cuts in as savings, because this way come election time the Democrats can’t bring them up and the Republicans can address them after their elected. Like Dave Ramsey pointed out, these weren’t real cuts anyway you slice it.

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