Why, exactly, do we need to extend the debt limit to the point where the federal government can borrow another $2.4 trillion (hardly a nice round number) — about the same amount of money, even in inflation-adjusted dollars, that we borrowed to fight all of World War II? Because, as Treasury Secretary Timothy Geithner made abundantly clear during his Fox News Sunday interview with Chris Wallace, $2.4 trillion is the amount of money that the Obama administration thinks it needs to borrow (on behalf of taxpayers, who will have to pay it back) to get Obama through the next election.
Here is Secretary Geithner, during his interview:
“Chris, let me tell you what we’re trying to do, what the president is trying to do, is, first and most important, we have to lift this threat of default from the economy for, you know, for the next 18 months. We have to take that threat off the table through the election….”
Geithner then proceeded twice more to reiterate the importance of the 18-month timeline for getting through the election.
How’s that for taking the long-term view?
Two other points are worth noting from the interview. The Treasury secretary blamed this year’s slow rate of economic growth partly on “a lot of bad weather” — and also on the fact that “oil prices went up.” Of course, Americans wouldn’t be as vulnerable in the long-term to rising oil prices if the Obama administration weren’t so adamantly opposed to domestic exploration, particularly in Alaska.
In the course of the interview, Wallace also observed that “Republicans have offered several specific plans to deal with the national debt,” noting, “They have the Ryan plan. They had cap, cut and balance. You guys have no plan….”
Geithner replied that Obama has “a framework.” Wallace responded, “…which the CBO director said is so fuzzy, he couldn’t even score it.” Geithner then repeated the principal Democratic talking point against Ryan’s bold and responsible plan to reform Medicare — that it would allegedly, in Geithner’s words, “require beneficiaries of Medicare to pay $6,500 a year more…for Medicare benefits than they do today.”
That claim, however, contradicts 40 years of empirical evidence about whether the government or the private sector does a better job of controlling health costs. It also obscures the fact that the Ryan plan wouldn’t affect anyone who’s currently at least 55 years of age. In fact, Ryan’s Medicare reforms wouldn’t even go into effect for more than a decade (in 2022) — a lot more than 18 months from now.