NYC Letter: Trust Team Barry, Part VI

Day 133 of CHOPE

United States Treasury Secretary and tax naïf Tim Geithner is in China amusing the locals with the same CHOPEy talk that so beguiles the stateside press.

GEITHNER TELLS CHINA ITS DOLLAR ASSETS ARE SAFE

BEIJING June 1, 2009 (Reuters) - U.S. Treasury Secretary Timothy Geithner on Monday reassured the Chinese government that its huge holdings of dollar assets are safe and reaffirmed his faith in a strong U.S. currency. Mr. Geithner, in response to a question after a speech at Peking University:

Chinese assets are very safe.

His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.*

AMERICA BROKE, HA-HA, AMERICA NO WORRY
Obamanomics Ushers In The Chinese Century
[Trans.: CHINA, America's Future]

It will be helpful if Geithner can show us some arithmetic.

Yu Yongding,
senior researcher at the government-sponsored
Chinese Academy of Social Sciences
and former central bank adviser,
putting Treasury's empty assurances on the spot
June 1, 2009 (Bloomberg)

Ah, Mr. Yu, good luck with that. The Obama administration has a difficult time with numbers. For example:

GAO SAYS GEITHNER WRONG:
ONLY $32.6B IN UNCOMMITTED TARP

April 1, 2009 (ABC News) - On "This Week" Sunday, Treasury Secretary Tim Geithner told me [scil., George Stephanopoulos] that there was about $135 billion of uncommitted funds left in the TARP, the government's financial rescue package.

But the Government Accountability Office, a non-partisan federal agency, reports that figure is closer to $32 billion, which is what ABC News and other independent analysts thought.

And this.

Again, I don't know what spiraling debt you're referring to, but we're inheriting a budget situation that is a mess, and that we're working our way out of. And under both budget resolutions, the deficit is reduced in half [vid. Gregg infra] -- by more than half by 2013, and actually then is either stable or declining between 2013 and 2014. So I guess I just -- I take issue with the conjecture that we're -- you know, there's spiraling debt here.

Q: Well, I was referring to your original proposal.

Sorry?

Peter Orszag,
Director, Office of Management and Budget,
clueless on his handiwork quadrupling the deficit
this year and compounding deficits into the distant future
PRESS CONFERENCE March 25, 2009 (NYT/White House)

And arithmetic -- numbers plus functions -- is more baffling still.

GREGG: BUDGET FORECAST A LIE

March 12, 2009 (MSNBC) - In a hearing before the Senate Budget Committee [Senator Judd] Gregg [R-NH] dressed down Geithner with facts, figures, and charts.

"The argument that this budget doesn't have tax increases [on everyone] is, I think, an 'Alice in Wonderland' view of the budget," he said.

He challenged the budget's math on cutting the debt: "When you take the deficit and quadruple it and then you cut it and half, that's like taking four steps back and two steps forward. That's not making any progress; you're still going backwards."

OBAMA’S BIG PLAN DEFIES ECONOMICS

WASHINGTON April 17, 2009 (AJC/WaPo) - The Whopper: The boast that he had “identified $2 trillion in deficit reductions over the next decade.” It takes audacity to repeat this after it had been so widely exposed as phony. Most of this $2 trillion is conjured up by refraining from spending $180 billion a year for 10 more years of surges in Iraq. Hell, why not make the “deficit reductions” $10 trillion -- the extra $8 trillion coming from refraining from repeating the $787 billion stimulus package annually through 2019.

CHOPE just omits these difficulties.

CURRENCIES SELL OFF AS
GEITHNER'S SUPER TARP DISAPPOINTS**

February 10, 2009 (fx360.com) - Geithner has announced a cocktail of initiatives using "things we haven't tried before" and warned "that we will make mistakes." If the Treasury Secretary is not 100 percent confident in his own plan, how could investors be?

ORSZAG: HEALTH CARE REFORM
WON'T INCREASE THE DEFICIT
WASHINGTON May 17, 2009 (CNN)

Mr. Orszag here claims Mr. Obama's health care reform, with a projected ten-year cost of $1.5 trillion, will be self-financing, deficit-neutral over a five- or ten-year window. [Pause.] Why then has the administration already budgeted a $634B "down payment"? That is money from somewhere. Surprise! -- it's mostly money from higher taxes on the wealthy, if there are any left in the out years.***

Ed Morrissey at Hot Air reminds us:

One has to bear in mind that Orszag was the man who presciently set the odds of a Fannie Mae/Freddie Mac failure at 3,000,000 to 1, and that such a failure would only cost the government $2 million. That cutting analysis came at the behest of … Freddie Mac. While at the CBO, Orszag also helpfully corroborated the claims from the controlling party of Congress -- Democrats -- that Social Security would have surpluses for the next eleven years. Eight months later, the surpluses have disappeared.

CHOPE.

Airy assurances + No arithmetic = Magical security

------------------------------------
* It's not as if America hasn't made meaningful investments in China.

** Eventually Mr. Geithner released a plan describing the mechanics, which was all the more troubling.

.*** Once we're all poor, taxes will be that much fairer.

Posted by Damian at June 2, 2009 08:34 AM