I know. The actual headline of the referenced article reads "pitching U.S. debt" but we all know what this really amounts to. It is a vindication of Margaret Thatcher when she said: "The problem with socialism is that you eventually run out of other people's money."
Unfortunately for Obama and his Democrat cronies, it happened much sooner than they expected. So now, Secretary Geithner must go abroad and seek new infusions of funds to support what amounts to a socialist agenda.
From the Associated Press:
|Timothy Geithner, architect of bank, auto and economic rescue plans, has another high-stakes job these days: traveling bond salesman.|
Geithner, who traveled last week to the Middle East and Europe, has to convince foreign investors to keep buying Treasury bills, notes and bonds; they hold nearly half of the government's roughly $7 trillion in publicly traded debt.
But all of this comes with very grave dangers to the U.S. economy. Not just selling the debt but the deficit spending which drives the debt up even further.
|If foreign demand for U.S. debt sags, that could drive up interest rates and spell big trouble for an economy hobbled by 9.5 percent unemployment. Higher rates would make it more expensive for consumers to buy homes and cars, and for businesses to finance their operations.|
In the worst case scenario, a rush by foreigners to sell their U.S. debt could send the dollar crashing and inflation soaring.
Although some analysts say that this would never happen, don't pretend that the possibility isn't there. After all, the analysts were convinced that the Japanese would never be able to attack Pearl Harbor.
But there are some very telling signs about how the rest of the world feels about our government's current spending spree:
|Last month, [Geithner] visited China, the largest foreign holder of U.S. Treasuries. That trip was marked by an extra dose of drama. In March, Chinese Premier Wen Jiabao said his country was concerned about the "safety" of the large amounts of money it had lent to the United States.|
The deficit-cutting proposals the administration has so far revealed would fall far short of what is needed.
"If the Obama administration has a credible plan to bring the deficits down, they are keeping it a deep secret at the moment," said Michael Mussa, senior fellow at the Peterson Institute and former chief economist at the International Monetary Fund.
With nearly three months left in the budget year, the Obama administration forecasts that this year's deficit will total $1.84 trillion, more than four times the size of last year's record tally.
When Geithner told a packed auditorium at Peking University that Chinese investments in the U.S. were safe, his comment was greeted by laughter.
That should have been a huge eye-opener to Geithner, Obama and the Democrats who continue to call for spending like drunken sailors.
It should be a huge eye-opener for the rest of us as well.
You can access the complete article on-line here:
Geithner Travels Globe, Pitching U.S. Debt
Associated Press via MSNBC
July 19, 2009