Geithner Freaking Out over Possible "National Catastrophe"

Posted by Ian Cooper - Friday, January 7th, 2011

Here's an idea... let's just keep kicking the can down the road, and accumulate more debt.

Wealth Wire readers, what are your thoughts on this?

From The Washington Post:

In a letter sent to every member of Congress, Geithner said the national debt stands at $13.95 trillion - $335 billion short of the limit on borrowing that Congress set last year. Unless Congress acts to raise the limit, the letter says, the United States will default on its debt, an unprecedented event that could destroy "millions of American jobs," cause interest rates to spike, damage the dollar, and halt payments to millions of Social Security recipients, veterans and active U.S. troops.

"Failure to increase the limit would be deeply irresponsible," Geithner wrote. "For these reasons, I am requesting that Congress act to increase the limit early this year, well before the threat of default becomes imminent."

The letter comes one day after Republicans took control of the House, their membership reinforced with new lawmakers who have vowed to block further borrowing, a top priority of the conservative tea party movement. Newly elected House Speaker John A. Boehner (R-Ohio) acknowledged Wednesday that default must be avoided, but he said Republicans would demand deep spending cuts and budget reforms in exchange for raising the limit on borrowing.

"The American people will not stand for such an increase unless it is accompanied by meaningful action by the president and Congress to cut spending and end the job-killing spending binge in Washington," Boehner said in a statement. "While America cannot default on its debt, we also cannot continue to borrow recklessly, dig ourselves deeper into this hole and mortgage the future of our children and grandchildren."

Read more here.

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