Posted on 09/12/2010 3:35:16 PM PDT by John Semmens
The Congressional Budget Office is warning that the rapidly growing federal debt could reach crisis proportions if it isn’t hemmed in soon.
“When you owe money you have to pay it back with interest,” the CBO wrote. “For this to be feasible your future income stream has to grow faster than the interest rate on that debt. When economic growth fails to match debt repayment requirements default and bankruptcy are the result.”
US Treasury Secretary Timothy Geithner dismissed the CBO report as “out of touch with modern monetary realities. Federal debt isn’t like private debt.
Private debtors have to worry about how they’re going to earn the money needed to pay back lenders. The federal government doesn’t. We have options that private borrowers don’t have.”
“Taxes don’t have to be earned,” Geithner pointed out. “They can just be imposed. For example, income tax rates once went as high as 90% in this country and 95% in others. We could reinstitute these rates if we have to. On the other hand, the Federal Reserve can simply create as much money as we need to cover payments on our debt. Finally, the President could declare a moratorium on debt repayment for the duration of the recession. So, really, there’s no finite limit on how big the US debt can get. The CBO is getting worked up over nothing.”
(Excerpt) Read more at azconserv1.wordpress.com ...
Had me going there for a moment.
Fake but accurate.
I’d take the word of a tax cheat and evader, currently the head of the IRS, anyday..../s =.=
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