GEITHNER’S OBLIGATORY OPTIMISM…. This may sound like naivete, but it’s actually evidence of a different problem.
Treasury Secretary Timothy Geithner says he is certain that Congress will raise the debt ceiling, saying leaders are “not going to play around with it” and risk the “catastrophic” consequences of defaulting on the nation’s debt obligations.
“I want to make it perfectly clear that Congress will raise the debt ceiling,” Geithner said in an interview with ABC News “This Week” anchor Christiane Amanpour. When asked if he was sure, Geithner responded, “absolutely,” adding that Congressional leaders made clear they understood the importance of the matter when meeting with President Barack Obama at the White House last Wednesday.
“I sat there with them, and they said, ‘We recognize we have to do this.’ And we’re not going to play around with it,” Geithner said of last week’s White House meeting. “We know that the risk would be catastrophic.”
“This is just about the basic trust and confidence in the United States,” Geithner added. “It’s about the basic recognition that we made commitments, we have to meet our commitments. There’s no alternative, and they recognize that.”
What I suspect is going on here is that the Treasury Secretary, even if he has doubts about Republicans’ sanity, has to appear confident and certain — because he knows investors, the financial industry, and foreign markets are listening. Remember, the House Speaker recently reached out to Wall Street, asking how much wiggle room he has to play partisan games for a couple of months without doing significant damage to the American and global economy.
Wall Street executives told Boehner “even pushing close to the deadline — or talking about it — could have grave consequences in the marketplace.”
It’s why Geithner has to go on national television and assure the world that, as truly ridiculous as congressional Republicans can be, there’s nothing to worry about — the world’s largest economy will not default, the full faith and credit of the United States government remains strong, and policymakers will “absolutely” do the right thing.
Whether the Treasury Secretary believes it or not is irrelevant — he needs everyone else to.