Geithner to Gowdy: If Treasury could ask for just one more debt ceiling increase, the amount we’d request “would make you uncomfortable”

posted at 4:50 pm on March 21, 2012 by Tina Korbe

At a Capitol Hill hearing today, South Carolina Republican Rep. Trey Gowdy asked Treasury Secretary Tim Geithner a thought-provoking hypothetical question. The congressman wanted to know:

“If this were the last debt ceiling request you could ask for … the final one and you had to make it large enough for all current and future obligations, what would the request need to be?”

Not surprisingly, Geithner didn’t have a ready answer, but Gowdy didn’t let it go. At last, Obama’s only remaining original economic team member admitted, “It would be a lot. It would make you uncomfortable.”

As we learned last summer, the question of whether debt ceiling increases should be treated as routine or harnessed to achieve important budgetary priorities is one that can divide even conservatives. Just as I was then, I’m still firmly in the camp that’s unafraid to risk default, however painful that would be (and it would be painful!). Conservatives in Congress should continue to fight for meaningful entitlement reform and spending cuts every time the Treasury asks for a debt ceiling increase. In a personal financial crisis, it would be unthinkable to ask for an expanded line of credit without doing something to reassure creditors that you’re taking steps to ensure you’ll eventually be able to repay your debts. It should be unthinkable in a national financial crisis, too.

Notice that, since this summer, the debt ceiling has increased and the debt itself has also increased — but Congress has not enacted any kind of meaningful deficit reduction plan. What’s to prevent this from continuing until we are like Greece? One way or another, the nation will eventually be forced to learn to do without government programs it cannot afford.

Update: This post originally suggested that Tim Geithner was the last remaining member of Obama’s Cabinet, when, in fact, he is the last remaining member of Obama’s economic team.

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Bmore on March 21, 2012 at 4:52 PM

He’s the last remaining person from his original economic team… I think almost all of his original cabinet is still around…

Critic2029 on March 21, 2012 at 4:54 PM

Out there somewhere is a big ol’ bus with Geithner’s name on it.

SD Tom on March 21, 2012 at 4:55 PM

It’s great to see one of the President’s team explaining their real plan: spend, spend, spend . . . pause . . . spend . . . Well, you get the point. Nice to see the veil lifted.

diplomatsteve on March 21, 2012 at 4:55 PM

Hey, if it works so well, lets just give them a hundred thousand trillion. We’d finally have Utopia, right?

JellyToast on March 21, 2012 at 4:55 PM

What’s the point of a debt ceiling if we have to raise it everytime we get close to it?

Bitter Clinger on March 21, 2012 at 4:57 PM

The only meaningful difference between our debt level and Greece’s right now is that we can print our own money, inflating our way out of debt, and they can’t. Our economy is obviusly much larger but our debt as a percent of that GDP is greater than Greece, right now, today. Our tax system is much more efficient (ie, higher compliance), but then it has to be.

We’re in deep trouble.

MTF on March 21, 2012 at 4:58 PM

Mr Goldman Sux is so clueless,
I wonder why ?

burrata on March 21, 2012 at 4:59 PM

Sounds like Geithner has been coached!!

canopfor on March 21, 2012 at 5:00 PM

Shut it down. Shut it down, shut it down, shut it down!

Republicans grow some testicles and call the lefts bluff. Democrats are terrified of a government shutdown because a government shutdown would demonstrate shut how little we need the government.

Just as I was then, I’m still firmly in the camp that’s unafraid to risk default, however painful that would be (and it would be painful!).

You still believe in that malarkey? How many times do you need to be told our current revenues are way more then enough to service our debt?

NotCoach on March 21, 2012 at 5:00 PM

Our tax system is much more efficient (ie, higher compliance), but then it has to be.

We’re in deep trouble.

MTF on March 21, 2012 at 4:58 PM

And a good way to raise that efficiency more would be to lower rates and/or simplify the tax code in revenue-neutral ways.

Of course, that won’t happen because the Boy-King will refuse to admit that Laffer was right that higher taxes usually mean a net loss in revenues.

teke184 on March 21, 2012 at 5:02 PM

Collapse.

Bmore on March 21, 2012 at 4:52 PM

We’ll be using Tide Detergent as currency.

Oops. We’re already doing that.

Banana Republic time.

portlandon on March 21, 2012 at 5:03 PM

It’s becoming quite clear those of the National Socialist Left don’t care whether we have our fiscal house in order.

Clearly they think that overloading the system would a great way to ‘Spread the wealth around’.

They have to have the brains to know that this is what they advocate.

They truly want the country run off a cliff.

There is no other explanation.

Chip on March 21, 2012 at 5:04 PM

Shut it down. Shut it down, shut it down, shut it down!

Republicans grow some testicles and call the lefts bluff. Democrats are terrified of a government shutdown NotCoach on March 21, 2012 at 5:00 PM

Mitt won’t want a shutdown, I guarantee it.

8 weight on March 21, 2012 at 5:05 PM

Hey, if it works so well, lets just give them a hundred thousand trillion. We’d finally have Utopia, right?

JellyToast on March 21, 2012 at 4:55 PM

Utopias don’t live on cash alone; they need blood.

squint on March 21, 2012 at 5:05 PM

It’s all Congress’s fault, you see.

ctmom on March 21, 2012 at 5:08 PM

June 29, 2011, 11:52 AM
Full Text: Geithner Letter Responding to Republicans on Debt Limit
******************************************************************

Treasury Secretary Timothy Geithner pushed back against calls from a group of Republican lawmakers to prioritize paying interest on debt and cut spending instead of raising the debt ceiling. Here is the full text of his letter and the full text of the original letter Geithner is responding to:(More….)
********************************************

http://blogs.wsj.com/economics/2011/06/29/full-text-geithner-letter-responding-to-republicans-on-debt-limit/

canopfor on March 21, 2012 at 5:10 PM

We’ll be using Tide Detergent as currency.

Oops. We’re already doing that.

Banana Republic time.

portlandon on March 21, 2012 at 5:03 PM

Heading for my beloved mountains, in 5, 4, 3, 2 ……………

Bmore on March 21, 2012 at 5:13 PM

Oh, and you 0 apologist trolls, heed this advice. Probably not the thread you seek.

Bmore on March 21, 2012 at 5:14 PM

O/T,US citizens in harms way!!
——————————

More:
******

US State Department says embassy in Bamako is monitoring the situation closely and has advised US citizens in Mali to shelter in place

Submitted 3 mins ago
===================

Update:
*********

Heavy gunfire heard in the Malian capital Bamako after an earlier protest by soldiers

Submitted 12 mins ago from http://www.bbc.co.uk
http://www.breakingnews.com/
==============================

canopfor on March 21, 2012 at 5:15 PM

We’ll be using Tide Detergent as currency.

Oops. We’re already doing that.

Banana Republic time.

portlandon on March 21, 2012 at 5:03 PM

portlandon:Lol:)

canopfor on March 21, 2012 at 5:17 PM

On a purely personal level, I’m beginning to feel like I’m in a race to see whether I’ll die before the coming economic collapse or live to see it (I’m 57, in case that matters). I wondering which would be worse but I know that both are inevitable. As long as we have liberals screaming like banshees anytime anyone brings up the mere thought of cutting government programs, as long as roughly half of Americans pay nothing in income taxes and have no skin in the game, as long as generation after generation believes that the goverment ‘owes’ them without stopping to think about who pays, as long as those same idiots continue to vote for whoever promises the most goodies and as long as Republicans focus more on electability than reform, I just don’t see this changing.

natasha333 on March 21, 2012 at 5:22 PM

It’s becoming quite clear those of the National Socialist Left don’t care whether we have our fiscal house in order.

Clearly they think that overloading the system would a great way to ‘Spread the wealth around’.

They have to have the brains to know that this is what they advocate.

They truly want the country run off a cliff.

There is no other explanation.

Chip on March 21, 2012 at 5:04 PM

You mean this by any chance? Read it if you haven’t already. Your progressive enemies have.

turfmann on March 21, 2012 at 5:23 PM

This is Rep Ron Paul’s wheelhouse. Will he vote to raise the debt ceiling again to another uncomfortable amount?

This is like badminton and Geithner just lobed a slow moving birdie at the republican candidates.

Dr Evil on March 21, 2012 at 5:25 PM

Chip on March 21, 2012 at 5:04 PM

You mean this by any chance? Read it if you haven’t already. Your progressive enemies have.

turfmann on March 21, 2012 at 5:23 PM

That is precisely what I mean – or a slight variation thereof.

Chip on March 21, 2012 at 5:27 PM

SHUT IT DOWN!

GarandFan on March 21, 2012 at 5:28 PM

Tweetys,Oops and yes,not the same Hearing!!
————————————–

House Republicans tweet frustration with Geithner during hearing
10/06/11 04:51 PM ET
*********************

Republican congressmen vented their frustration with Treasury Secretary Tim Geithner on Thursday during his testimony to the House Financial Services Committee.

The Financial Services Committee live-tweeted the hearing @FinancialCmte using the #Geithner hashtag, with Republicans accusing Geithner of sidestepping questions.

Rep. David Schweikert (R-Ariz.) tweeted: “#Geithner avoids comment on #OccupyWallStreet protestors: ‘sense of concern on 9% [unemployment]. Well, we need to unwind regulations #4jobs!”

Rep. Lynn Westmoreland (R-Ga.) wrote: “Can’t believe that after cancelling 4 times, #Geither is trying to sneak out early before members get their Qs answered. @FinancialCmte”

Westmoreland also attacked his Democratic colleagues for not asking Geithner tough questions.

“It’s unfortunate so many Ds in @FinancialCmte hearing are throwing #Geithner softball Qs. We need real answers on actions of Treasury Dept,” he tweeted.(more….)
=====================================

http://thehill.com/blogs/twitter-room/other-news/186107-house-republicans-tweet-frustration-with-geithner-during-hearing

canopfor on March 21, 2012 at 5:29 PM

Not surprisingly, Geithner didn’t have a ready answer, but Gowdy didn’t let it go. At last, Obama’s only remaining original Cabinet member admitted, “It would be a lot. It would make you uncomfortable.”

I’m so glad we have Geithner in there. He alone is uniquely qualified to give such a thoughtful and thorough analysis….or so I’ve been told.

BlueCollarAstronaut on March 21, 2012 at 5:30 PM

Not surprisingly, Geithner didn’t have a ready answer, but Gowdy didn’t let it go. At last, Obama’s only remaining original Cabinet economic team member admitted, “It would be a lot. It would make you uncomfortable.”

If Geithner took the “last time you” to mean “Geithner specifically, before 1/20/2017″, then the number is somewhere around $20-$22 trillion. If it’s “last time ever”, forget about it; it would need to be infinite under Obama’s spending plans.

Steve Eggleston on March 21, 2012 at 5:30 PM

Tax cheat.

AttaBoyLuther on March 21, 2012 at 5:30 PM

O/T….ahem,a heads-up!!
———————–

New Hampshire House kills bill that would have repealed gay marriage, replaced it with civil unions

Submitted 3 mins ago from http://www.wtop.com
http://www.breakingnews.com/
=============================

canopfor on March 21, 2012 at 5:31 PM

SHUT IT DOWN!

GarandFan on March 21, 2012 at 5:28 PM

It will shut down under its own weight. Clock ticks……………

Bmore on March 21, 2012 at 5:41 PM

“How can them govt be out of monies when theys still has checks in theirs checkbook?”

- libtard4life

NapaConservative on March 21, 2012 at 5:42 PM

The only meaningful difference between our debt level and Greece’s right now is that we can print our own money, inflating our way out of debt, and they can’t. Our economy is obviusly much larger but our debt as a percent of that GDP is greater than Greece, right now, today.

MTF on March 21, 2012 at 4:58 PM

No, Our Debt to GDP ratio last year was 94.36% Greese’s was 142.76%

Also, Yes we do just print money.

elfman on March 21, 2012 at 5:45 PM

“If this were the last debt ceiling request you could ask for … the final one and you had to make it large enough for all current and future obligations, what would the request need to be?”

What’s the word for 1 billion trillion dollars?

Still wouldn’t be enough for these incompetent wastrels.

MichaelGabriel on March 21, 2012 at 5:47 PM

“The debt,” Geithner says, “is big. Really big. You just won’t believe how vastly, hugely, mindbogglingly big it is. I mean, you may think it’s a long way down the road to the chemist’s, but that’s just peanuts to the debt.”

A slight modification from a quote to The Hitchhiker’s Guide to the Galaxy. This quote always comes to mind when Geithner wants to increase the debt ceiling.

Kingfisher on March 21, 2012 at 5:50 PM

One way or another, the nation will eventually be forced to learn to do without government programs it cannot afford.

I don’t think it will be the one way. I think the cowardice in Washington is going to compel the other way. God help us.

trigon on March 21, 2012 at 5:55 PM

What’s the word for 1 billion trillion dollars?

Still wouldn’t be enough for these incompetent wastrels.

MichaelGabriel on March 21, 2012 at 5:47 PM

Octillion, I think.

But, that’s nothing. I think these guys are in for the full googleplex.

trigon on March 21, 2012 at 5:58 PM

History tells us that humanity will choose the option among the choices that causes the maximum amount of pain. There will be no soft landing because there is no political will to cut the necessary spending to avoid catastrophe. Thus, there will be a period of austerity that will involve lots of pain and suffering physically, financially, and economically.

This is unavoidable. History has determined our outcome.

Weebork on March 21, 2012 at 6:13 PM

“Obamatrillion”

n.

An obscenely large and incredibly foolish number.

MichaelGabriel on March 21, 2012 at 6:14 PM

Funny how 0 apologist’s never show up to these threads.

Bmore on March 21, 2012 at 6:15 PM

How many zeros in a gazillion?

Hello, Weimar Republic.

AZCoyote on March 21, 2012 at 6:15 PM

Funny how 0 apologist’s never show up to these threads.

Bmore on March 21, 2012 at 6:15 PM

Sorry.

Funny how 0 apologists never show up to these threads.

Bmore on March 21, 2012 at 6:15 PM

Fixed.

Bmore on March 21, 2012 at 6:17 PM

Obamabucks. That’s what’s happenin next!

/I hear they’re free and socially justified.

Key West Reader on March 21, 2012 at 6:26 PM

I’d like to see the question asked “What would it take for us to START GOING THE OTHER WAY???”.

Wagthatdog on March 21, 2012 at 6:28 PM

Obamabucks. That’s what’s happenin next!

/I hear they’re free and socially justified.

Key West Reader on March 21, 2012 at 6:26 PM

Obamabucks for everybody who doesn’t want to work with a bunch of baby mommas.

That’s the Obamanation now.

Wagthatdog on March 21, 2012 at 6:30 PM

We are ONE failed treasury auction away from the complete collapse of not only the Dollar but the whole welfare state.

wildcat72 on March 21, 2012 at 6:33 PM

Yah Timmay – having to go back to congress with your hand out ever six months sure is inconvenient, isn’t it? What a buckethead.

Abiss on March 21, 2012 at 6:35 PM

If the over / under is 100 trillion, I am taking the over.

AndrewsDad on March 21, 2012 at 6:37 PM

Hello, Weimar Republic.

AZCoyote on March 21, 2012 at 6:15 PM

I have to get that flat tire on my wheelbarrow fixed.

slickwillie2001 on March 21, 2012 at 6:47 PM

Translation: “There IS no limit to how much of your money I want to spend.”

Ask a stupid question; get a stupid answer.

logis on March 21, 2012 at 7:03 PM

A default will be bad.

The rest of the world bailing on the idea of the dollar as the global reserve currency will be catastrophic.

Dack Thrombosis on March 21, 2012 at 7:05 PM

Quit harassing little Timmy Geithner, he is still working on his 2009-2011 taxex.

Smedley on March 21, 2012 at 7:10 PM

The correct answer would have been:

“Nothing. We do not need a debt ceiling hike, nor will we ever again since we’ve passed a budget that spends no more than we take in on an annual basis.”

Defenestratus on March 21, 2012 at 7:24 PM

No, Our Debt to GDP ratio last year was 94.36% Greese’s was 142.76%

Also, Yes we do just print money.

elfman on March 21, 2012 at 5:45 PM

You make the common error of ignoring state and local debts ($2.7 trillion at the last census), unfunded public pension liabilities (estimated at $4 trillion, under ridiculous rates of return assumptions, and really probably three times that amount), and your base numbers are out of date. As of yesterday our public federal debt was at $15.4 trillion. All together, and not adjusting the pension obligations for reality, the total is approximately $22 trillion. Measured against a 2011 GDP of $15.320.8 trillion our aggregate public debt exceeds 150% of GDP. That’s worse than Greece.

Happily, as I said, we can inflate our currency and print our way out of the problem but get used to huge prices for everyday items. Don’t get too hungry and try not to drive, lest you need gasoline.

MTF on March 21, 2012 at 8:21 PM

Sounds like Geithner has been coached!!

canopfor on March 21, 2012 at 5:00 PM

…he’s been TURBO TAXED!

KOOLAID2 on March 21, 2012 at 8:44 PM

Why would hitting the debt ceiling cause a default? Both sides keep saying this. Why don’t they claim a government shutdown will cause a default during CR debates? In the event of hitting the debt ceiling, a lesser, partial 40% shutdown would create a surplus.

What would Geithner say?

deadman on March 21, 2012 at 10:37 PM

You make the common error of ignoring state and local debts ($2.7 trillion at the last census), unfunded public pension liabilities (estimated at $4 trillion, under ridiculous rates of return assumptions, and really probably three times that amount), and your base numbers are out of date. As of yesterday our public federal debt was at $15.4 trillion. All together, and not adjusting the pension obligations for reality, the total is approximately $22 trillion. Measured against a 2011 GDP of $15.320.8 trillion our aggregate public debt exceeds 150% of GDP. That’s worse than Greece.

Happily, as I said, we can inflate our currency and print our way out of the problem but get used to huge prices for everyday items. Don’t get too hungry and try not to drive, lest you need gasoline.

MTF on March 21, 2012 at 8:21 PM

You just compared US current and future national, state and local debt to only the Greek current national debt (and then updated only that of the US to 2012).

See here and here. Greeks future (unfunded) liabilities are a mess compared to the rest of Europe.

Don’t imagine that inflating our way out of debt is an option. Doing so would also drive up the cost of servicing our debt exponentially because it is mostly in < 5 yr bonds as I recall . And if instead we bought them all (which we're largely doing now), inflation would still worsen, the bonds would be junk on the market, and that's where we've deposited the funds to service much of those unfunded liabilities.

We have a very short time to slash government spending, lay off tens of millions and cut benefits before our whole financial system collapse. I think it's 2 years at most, maybe much less. Rand's budget (at least that of last year) is less than half of what's required.

elfman on March 22, 2012 at 11:26 AM

Start hoarding guns and ammo if you have not yet begun.

rjulio on March 22, 2012 at 4:50 PM