Sec. Geithner Warns Against ‘Premature Restraint’ During Conflicting Interview

In a somewhat conflicting interview with the Wall Street Journal, Treasury Secretary Timothy Geithner spoke out against the government finding fiscal responsibility too soon, warning that too many countries coming out of financial crises shift to “premature restraint.”

“[The] typical error most countries make coming out of a financial crisis is they shift too quickly to premature restraint,” he told the WSJ’s Deborah Solomon. He then called on the government to do more, such as support the president’s new $50 billion infrastructure spending proposal: “If the government does nothing going forward, then the impact of policy in Washington will shift from supporting economic growth to hurting economic growth.”

True to the Keynesian idea of government spending its way out of a recession, he said private individuals cannot be trusted to spur the economy:

He said the U.S. can no longer rely on consumer spending, which has long powered the economy, to be the growth engine that leads the recovery this time around and said Washington needed to plant the seeds for business investment and exports.

But in the same interview, Geithner admitted that government doesn’t have “unlimited resources.”

That comment came, however, when speaking against Bush-era tax cuts, not when discussing government spending. He calls those cuts “borrowing” from our children and says extending them would be imprudent: “We just don’t think it would be responsible for this country, given the size of our future deficits, and given the substantial burden the middle class has been bearing over the past decade in particular … .”

Absent from the articles account of his statements was any discussion on how government spending contributes to “future deficits.”

Comments (57)

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  • independentvoteril
    Posted on September 13, 2010 at 12:39pm

    What a BONE HEAD.. Why doesn’t he just tell the truth WE OWE BIG LABOR and have to pass this bill or they will KICK OUR BUTTS.. How about the STATES that collect money for infrastructure through taxes pay for them??? OH YA they are trying to find the money for STATE FUNDED WELFARE CALLED UNION PENSIONS..

    Report Post » independentvoteril  
  • BoilitDown
    Posted on September 13, 2010 at 12:25pm

    How much more history do we need to demonstrate that Keynesian economics does not work?
    How could, you possibly say it works after so many decades of failures?

    Report Post »  
  • Citizen-1
    Posted on September 13, 2010 at 12:24pm

    Geitner was over the NY Fed that allowed the Credit Default Swaps that crashed the economy along with the sub-prime lending debacle (FrankenDodd, FNMA, FMAC and HUD). This is the fox overseeing the hen house.

    Five steps to fix the mess:
    1.) Vote the bums out.
    2.) Repeal and/or not Replace Obamacare and the Financial Reform Act
    3.) Do not pass the Cap and Tax bill.
    4.) End the Federal Reserve Bank and the Banksters.
    5.) Print debt free money and pay off all of the trillions of US debt.

    Watch this video. This may be the most important documentary of our time. It’s two hours long but is well worth the education. Watch it in pieces if you have to but watch it. If the majority of the people actually knew how our monetary system worked, they would be appalled. The Secret of Oz. http://www.youtube.com/watch?v=D22TlYA8F2E

    And then here is a proposed bill: http://www.themoneymasters.com/monetary-reform-act/

    At first I was a Flat Tax guy. But then I found out about the Fair Tax and liked it better. Both of those are better than what we have now but they are just band-aids and not the answer. I now believe that the best way to fix our monetary system is to end the Fed. Then we would have zero percent federal taxes in some years and up to maybe 6% when the government needs to reduce the money supply. No more recessions or depressions! The government would simply spend money into existence, debt free. No more national debt. We would cap the federal budget at no more than 3% growth per year or less based on the population. This country would boom! As in the movie the Matrix, the Secret of Oz documentary is the red pill of truth. If you like where you are and really don’t want to know what is going on, don’t watch it. It’s pretty scary.

    Report Post »  
    • Juan Gault
      Posted on September 13, 2010 at 5:02pm

      Ty ty for the url sites, exceptional!!

      49 to remember november.

      Report Post »  
  • mrfred
    Posted on September 13, 2010 at 12:21pm

    Timmy, the twerp, cannot take criticism. His religion is power. He would love to see you in jail.

    Report Post »  
  • BoilitDown
    Posted on September 13, 2010 at 12:21pm

    You can boil it down to this…Consumers, Business and Banks are all paralyzed by radical government actions which are now constantly in flux. Yes, paralyzed Mr. Geitner by a rapidly expanded inept government which is obviously flailing around and out of control. Those people who buy good and services and create jobs are hunkering down intil sanity returns.

    Report Post »  
  • Marcobob69
    Posted on September 13, 2010 at 12:18pm

    This government won’t be happy until they have spent us into bankruptcy. They are addicted to spending, like a crack whore is to crack. TIME FOR REHAB! Starting November 2nd! Vote these bums OUT!!! Time to CLEAN HOUSE!

    Report Post »  
  • AmeriWoman
    Posted on September 13, 2010 at 12:18pm

    Listen to them ALL. They all know their time is FINISHED. They’re each and everyone of them in the public, spewing these ver simple words. In November it’s OVER. Their setting it up for a lame duck haul out and they’re all working on the public, trying to blame Republicans ahead of time so they can say we were forced to do it. Make no mistake about it…. Everyone of them from Ali Obama and his band of thieves down to the snivveling rino‘s are huddling and preparing for this and they’re are out in full force dropping little gas bombs, little hints and pushes about how their arms are being twisted back and it’s the only way to save America from the evil Republicans and Bush.

    This is going to get ugly.

    aw

    Report Post » AmeriWoman  
    • Beckofile
      Posted on September 13, 2010 at 1:04pm

      They never passed a budget this year. Ever heard of government shutdown and civil unrest. This is what they are planning after the midterms. They will not let a huge crisis go to waste then will they??? Get your guns, gold and god and be ready.

      Report Post » Beckofile  
  • grnhrn
    Posted on September 13, 2010 at 12:18pm

    Well little timmy if our all knowing governing elites would not have regulated and taxed all our companies out of our country the little people might have a few dimes left in which to stimulate the economy. Doesn’t help either that we now borrow money from china to loan-give to palistine,mexico,brazile,afghanastan, hell ill make it easy what country do we not give to….we are screwed unless we make some drastic changes more for my kids,grandkids then me since I’m on the downslope of the aging curve (lol)

    Report Post »  
  • Silversmith
    Posted on September 13, 2010 at 12:13pm

    Riiiight!! We can’t trust you to spend your money. We’ll do that for you!!

    PUTZ!

    Silversmith

    Report Post » Silversmith  
  • JamesTurner
    Posted on September 13, 2010 at 12:13pm

    All you have to do is read the article and realize this man doesn’t understand basic economics.

    Report Post » JamesTurner  
  • arkietech
    Posted on September 13, 2010 at 12:05pm

    We cannot be trusted on how to spend our own money. Government (this yoyo) can do it better! So send it in.

    Report Post »  
  • kb1200cc
    Posted on September 13, 2010 at 11:59am

    If as a financial planner, a client walked into my office and described his current financial situation as the same as our country. If I then told him implement the same strategy as this moron partisan hack is advocating, I`d be guilty of malpractice plain and simple. Sometimes the solution IS as simple as it sounds. Cut taxes, grow small businesses and ELIMINATE SOCIAL SPENDING.

    Report Post » kb1200cc  
  • Flown Over Too Long
    Posted on September 13, 2010 at 11:54am

    I think Newt could have said Obama’s Keynesian outlook rather the Kenyanesian and still nailed these Marxists and their untenable, clearly unworkable policies correctly

    Me thinks the leftists have no concept of the invisible hand and how it works — they might be amazed that the Wright brothers came up with the flying machine; Bell, the telephone; and Edison, the light bulb with no government direction!

    Have these guys not looked at facts, at history – even the ChiComs have warned them about the failure of central planning – they are just Chicago style government thugs enriching their patronage machine!

    Report Post »  
  • phoenixbetrayal
    Posted on September 13, 2010 at 11:49am

    Just think…any kind of “premature restraint” would have kept us out of this mess in the first place. I’m only 26 and I know how to balance a checkbook. How have the cronies in Washington not figured this out yet? Negative gagillion minus fifty billion = morons.

    Report Post »  
  • alkmetro
    Posted on September 13, 2010 at 11:49am

    Liberals Lie……..nuff said, Once you know this…it all makes sense.

    Report Post »  
  • Hydejustice
    Posted on September 13, 2010 at 11:34am

    Always remember, it will never be enough and all the pain and discomfort you are feeling is a direct result of thier true desires and aspirations. Every action and every restraint taken that imposes a hardship upon you and your family is done with the intent to arrest personal control away from you and into the hands of a nameless all knowing decision maker, we have surendered reality for peace of mind, we have sacrificed justice for mercy and this is all a direct result of the faceless mobs surrendering thier minds to those who we are told know better, welcome to your new master the tax cheat Timothy geitner.

    Report Post »  
  • RodT82721
    Posted on September 13, 2010 at 11:33am

    Here’s a guy that had trouble with Turbo-Tax, and he’s telling us how to solve his economic problems. His way is to spend more money he doesn’t have, since it’s the taxpayers that will be required to pay it back with interest. He will be long gone by then, back to Wall Street and a nice comfy job, with his taxpayer paid-for retirement golden parachute.
    This was “the only man” that could solve our problems! It seems he really couldn’t deliver either.

    Report Post »  
    • shastadiane
      Posted on September 14, 2010 at 12:05am

      He must have used Turbo Tax to do our Country’s taxes too. Easy to make a mistake. He thought it was entered correctly!

      Report Post »  
  • noverton
    Posted on September 13, 2010 at 11:33am

    Let me see,..
    Tax cuts that make the Governmnet poorer are Bad.

    Government spending money that they don’t have and going farther into debt is Good?

    All we need is Herve Villechaize standing on the steps of the White House shouting “Da Plane Boss, Da Plane.”

    Report Post »  
  • Kathy H
    Posted on September 13, 2010 at 11:30am

    Heck he ought to try paying all his back taxes, and going after congress and the staffers to pay the income tax that they all owe… Tell Bernake to quit laundering money and monitizating our debt.. with the Bonds….

    Report Post » Kathy H  
    • RosePurple
      Posted on September 13, 2010 at 11:07pm

      If I remeber correctly…”Someone correct me if i’m wrong on this.” I want to say…back in the late eighties or early ninties. Politicians had their own bank. (yep, just for them). They had to close it down because “our politians” were writting bad checks and never paying back the money or their fines.

      Report Post »  
  • deanbob
    Posted on September 13, 2010 at 11:24am

    Mr Geitner, its not that the consumer cannot be trusted, consumer has no jobs – ergo, no money. Solution: create more provate sector jobs.

    Report Post »  
    • wingedwolf
      Posted on September 13, 2010 at 6:51pm

      Deanbob, LOL, government can’t create the kinds of jobs that grow and feed and economy. Only the private sector can do that, and this administration will NEVER, NEVER willingly allow situations to be created for that to happen. We will have to get our white house away from these union thugs before we will begin to see our economy become robust.

      Report Post » wingedwolf  
  • admojo
    Posted on September 13, 2010 at 11:17am

    He’s a dumb ass, plain and simple. Keynesian economic theory has never worked anywhere at any time. I agree with PRINTDEISGNCHICAGO.COM-get out of my way, get off my back and the small businesses with clean up the mess.

    Report Post » admojo  
    • jcatlanta
      Posted on September 13, 2010 at 12:19pm

      As I’ve gotten older I realized why I never could understand Keynesian Economics when I took eco 101 in college. It just didn’t seem logical. Now I can easily see why and what the answer is. Get the Government out of everything and let the people and the free market work.

      Report Post » jcatlanta  
    • Beckofile
      Posted on September 13, 2010 at 12:57pm

      Keynes works everytime we let them use the theory to destroy freedom. FDR used to grow massive government programs. It is not an economic theory it is however a theory to get us to submit to crisis based growth of government.

      Report Post » Beckofile  
  • printdesignchicago.com
    Posted on September 13, 2010 at 11:10am

    consumer spending, and even MANUFACTURING could be the ‘engines of growth’ for our economy, if the government would GET OUT OF THE WAY and stop screwing things up with bureaucratic regulations, taxes and controls

    cut government down to what it was intended for: National DEFENSE and Civil/Criminal courts

    LET US DO THE REST! oh wait… that gives the NON-PRODUCERS nothing to do! OMG! guess they better PRODUCE something instead of leeching off us by pretending to be ‘leaders’

    Report Post » printdesignchicago.com  
  • Gonzo
    Posted on September 13, 2010 at 11:08am

    “He calls those cuts “borrowing” from our children”. Since when has this administration had a problem with that?

    Report Post » Gonzo  
    • Beckofile
      Posted on September 13, 2010 at 12:52pm

      I have been noticing the same all week. The President said “We cannot afford the pricetag” in reference to extending the Bush tax cuts to the upper end job producer. Since when does it make any sense that because a robber has a credit card statement to pay he can justify the heist???? Keynes just might be wrong and they are enslaving us and our children by design. It is funny that they have found the one economic theory that justifies all the spending a government can possibly think of:) I can’t believe anyone can sign on to this train of utter crap????

      Report Post » Beckofile  
  • RojBlake
    Posted on September 13, 2010 at 11:03am

    I love how “tax-cuts” are bad for the economy but taking money away from someone so that the Government can determine who gets it is good for the economy.

    The other part of the equasion is that a “tax-cut” indicates that it is wrong for someone to keep their own money!

    Taxes restrict the movement of money (the defination of an economy), so it is logical to say that reducing taxes will allow for an increase in the movement of money.

    Report Post » RojBlake  
  • poppopschell
    Posted on September 13, 2010 at 10:59am

    To understand the context of his statements, you must look at his resume and history. As Glenn points out so0 well, history is a major part of context. Bottom lne, he is a broker for the dark elements of Wall Street and their desire for a Global Govt

    Report Post »  
    • dressseller
      Posted on September 13, 2010 at 11:06am

      This guy is UNBELIEVABLE! …..I hate to be so sophisticated in my remarks here.. but he is an IDIOT.. ..as are all the stupid marxists running this regime. I have no more words. ..except … HELP..

      Report Post »  
    • Debrabate
      Posted on September 13, 2010 at 11:14am

      he isnt unbelievable… he is a LIBERAL SOCIALIST… is there really a difference?

      Report Post » Debrabate  
    • klstj
      Posted on September 13, 2010 at 1:01pm

      Let‘s not loose track of what’s behind all of this. They know their economic policies are guaranteed to fail. That is their goal. They are working at a rapid pace to destroy America. They have to do it fast so we can’t get in the way. The only way to get the global government that they want is to cripple the USA and then force us to believe there is no other answer but to go global to survive. Prepare, they intend to destroy us and the only way they will succeed is through control, re financial reform, health care, social security. The other pieces they need, dependence on the government and civil unrest. They are close…remember their words, never let a good crisis go to waste.

      Report Post »  
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