Tim Geither, along with other spendthrifts in Washington, think that Democrats can continue spending like there’s no tomorrow. In a recent interview, he claims:
Absolutely not … That will never happen to this country…
…referring to the possibility of a ratings downgrade given a projected deficit of 1.6 trillion dollars next year. This is in response to:
Moody’s Investors Service Inc. last week said the U.S. government’s bond rating will come under pressure in the future unless additional measures are taken to reduce budget deficits projected for the next decade.
The downgrade won’t happen because of any internal factor but as Stanley Fischer puts it:
I don’t know who else would be the gold standard at this stage
As soon as a replacement is found for the Treasuries, down go their ratings.
