Timothy Geithner on Jobs, Debt, Taxes, Bailouts, and More

We live in tumultuous times. Citigroup (NYSE: C  ) , Wells Fargo (NYSE: WFC  ) , Bank of America, (NYSE: BAC  ) JPMorgan (NYSE: JPM  ) , and General Motors (NYSE: GM  ) may have repaid their bailouts, but the economic fallout of the financial crisis is still with us in the form of high unemployment and higher projected national debt.

We wanted to hear what the man tasked with tackling these issues is thinking about today. So two Fools put on their button-down shirts and went downtown to attend Politico reporter Mike Allen's interview of Treasury Secretary Geithner. What followed was a refreshingly frank discussion on a wide variety of topics.

Here's what he had to say. (Edited for brevity. A more comprehensive version is available here.)

On most of the bailouts being recovered
No one thought it was a realistic prospect we'd be where we are today. A lot of analysts at the time said the direct costs of the crisis would be in the trillions. It will be a very, very, very small ultimate cost to the taxpayer -- less than $100 billion altogether -- much smaller than the savings and loan crisis.

We didn't do it with enthusiasm, and we don't want to do it again.

On the recovery
As people save more and bring down their debt, growth slows. Because of the oversupply of houses, monetary policy doesn't have as much power to stimulate recovery. It takes time to work these things out.

Does the country have a jobs crisis?
Absolutely. Of course. Yeah. Millions of people are still looking for work, risk losing their homes, or are worried about their economic security.

While the political debate in Washington now seems overwhelmingly dominated by long-term deficits, the most important thing is to get more people back to work as quickly as possible.

On housing
We are sort of three or four years into the housing repair, but we've got several more years to go. But the pace of repair will depend much more on economic growth, which I expect will occur at a moderate pace.

On financial crises
Financial markets are a product of decisions made by humans, by individuals, and you can't prevent people from making mistakes. There'll be future financial crises. The job of government is to make those crises less frequent, less traumatic, and cause less collateral damage by putting in place better shock absorbers so the system is better able to adjust to those inevitable mistakes.

Will "dark forces" undermine financial reform?
It's very clear they're trying to starve the agencies of funding so they can't enforce protections for investors, and they are trying to block appointments as a way to get leverage over the outcome, and they are trying to slow down, so that they can weaken over time, those reforms.

They won't have success ultimately.

Which bank handled the crisis well?
I don't think any of them covered themselves in glory. They all got caught up in a race to the bottom in care and prudence. They all got caught up in the pressures that led to more leverage, more risk taking. And they all got caught up in a terribly damaging compensation race built on completely unrealistic expectations for what financial businesses could produce in terms of return.

On the Greek crisis
It's completely within Europe's capacity to manage this in a way with no collateral damage. It's not expensive. It's complicated, but it's not rocket science.

On threats to not raise the debt ceiling
I mean, really think about it: As a negotiating strategy, you are going to go say, "If you don't do things my way I'm going to force the United States to default?" It's not a credible negotiating strategy.

On Treaury's Plan B
Our plan is for Congress to pass the debt limit. Our fallback plan is for Congress to pass the debt limit. Our fallback to the fallback plan is for Congress to pass the debt limit.

On long-term debt reduction and RyanCare
The balance between revenues and savings is so important. The House Republican budget illustrates what you have to do if you are unwilling to touch revenues. If your objective is to leave in place these exceptionally low tax rates for the most fortunate Americans, then you are going to have to dismantle the basic commitments to our seniors, to the poor and to the elderly.

It's just not realistic, it's not going to happen, it's not possible. Balance is important not just for fairness, but for the credibility of the plan.

If people up there try to solve this by assuming away the problem, by using growth assumptions that create the illusion that we are going to solve it, by assuming there will be political courage in the future, that kind of magical thinking -- then the markets will say it's not real.

Those banks may be "too big to fail," but we've got "Too Small To Fail -- 2 Small-Caps the Government Won't Let Go Broke." To download a free copy of The Motley Fool's special report, click here.

David Williamson owns shares of General Motors. Ilan Moscovitz doesn't own shares of any company mentioned. The Motley Fool owns shares of Wells Fargo and JPMorgan Chase. Motley Fool newsletter services have recommended buying shares of General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 27, 2011, at 6:22 PM, JohnTransue wrote:

    Well said for a guy who doesn't pay his taxes.

  • Report this Comment On May 27, 2011, at 6:23 PM, glodev13 wrote:

    I think one of the biggest mistakes Obama made was placing Geithner on his team. They bailed out banks and big corporations who then gave out huge bonuses anyway. The struggling citizens, meanwhile, have to pay for it all. The money the banks received is not being given out in mortgages. If the bailout money had been given to ordinary citizens, believe me, we would be in a better state of financial affairs. We are supposed to cut back, while the government continues to spend. No wonder we have a budget crisis! Real creative accounting.....!!!!

  • Report this Comment On May 27, 2011, at 6:38 PM, liftbigski wrote:

    Congress should pass a law requiring all federal and regulatory staff to watch "Inside Job" for 24 hours straight. Then they can visit my gym so I can drop some weight on them like they dropped on my retirement plans.

    How a bout a graduated tax rate with an average of 18% and no deductions of any kind? Everything other than basic and essential services provided by the government would have to be paid through service fees and consumption fees. if you buy or use you pay. If you stay at home you only pay for basic service.

    Make everything simpler and everything becomes easier to implement and to monitor.

    Greed and complicated hiding places are correctable problems. Even my local city council members are paid retirement and health benefits on top of a sizable stipend. I thought it was volunteer community service with expense money. How silly of me.

  • Report this Comment On May 27, 2011, at 6:56 PM, wburzynski wrote:

    As a follow up to Glodev, think one of the biggest mistakes the American public made was to put Obama in the White House. What a mess!

  • Report this Comment On May 27, 2011, at 7:07 PM, rkor56 wrote:

    good interview

  • Report this Comment On May 27, 2011, at 7:08 PM, bedford777 wrote:

    Geithner is not exactly a real example to follow and definitely not Obama. Both are prime examples of what is wrong in Washington. To claim that we do not need to reform all of the entitlements and worst to ignore them is a prime example of an ostrich with its head in the sand. Please do not waste our time to read what he has to say which is really nothing but boiling our blood. If we had not reverse the process of an automatic stamp of approval on the Obama's spending, the economy would never have recovered fully. A lot of nonsense from true "Fools".

  • Report this Comment On May 27, 2011, at 7:15 PM, wheiv wrote:

    Let's see. Geithner a proven tax cheat. He forced GM and Chrysler into bankrupcy. And then he screwed the Delphi retirees out of their pensions to get GM out of bankrupcy. (Not to mention what happenned to the bond and shareholders.)

    In another 6 months he'll bail on Obama like the "new" mayor of Chicago did, 'cause why hang around to live with your decisions?

  • Report this Comment On May 27, 2011, at 7:19 PM, deadeyebart wrote:

    It quite obvious to me that Mr. Geithner is making and has made a major contribution to the problem. It is also quite obvious that he is entirely clueless as to any sort of solution. The only thing that government can do for(to) the private sector is to add stops and barriers to those individuals and corporations that produce the wealth in this country. Mr. Giethner and his associates need to get out the way and let business get on with production. Government at its best is a parasite on the economy, it produces nothing and takes by force money that would otherwise be spent on expansion, production and employment. Lower the debt ceiling, scale back government on all levels and let those who know how wealth is created get on with it.

  • Report this Comment On May 27, 2011, at 7:22 PM, TMFDiogenes wrote:

    @bedford

    "To claim that we do not need to reform all of the entitlements and worst to ignore them is a prime example of an ostrich with its head in the sand. "

    We were a bit short on space, but just to clarify, he talked a little bit about the need for additional cost-saving measures to build on the recently-passed health care overhaul. The thrust of his comment was about the need for balance.

    Ilan

  • Report this Comment On May 27, 2011, at 8:01 PM, Maple6239 wrote:

    Besides Obama, does anyone believe anything that Geithner says?

  • Report this Comment On May 27, 2011, at 8:12 PM, pkluck wrote:

    @TMF If anyone thinks obamacare is about cost-saving measures I've got a goose that lays gold eggs for sale. At some point people need to realize the US cannot tax their way out of this mess, either reform entitlements or watch them get severely cut down the road. obamacare, immigration reform, GM bailouts etc. etc. are not so cleverly disguised bribes for votes plain and simple. tim is lucky he's not in jail.

  • Report this Comment On May 27, 2011, at 8:16 PM, pkluck wrote:

    I might add obama himself proclaimed when he was a senator that raising the debt ceiling was irresponsible and showed a lack of leadership of the president. I guess he changed his mind.

  • Report this Comment On May 27, 2011, at 8:26 PM, wesevans wrote:

    The liberal progressive agenda of the Obama Geithner team does not bode well for the private sector of the American economy. The interest here is political power and history may be on their side with 51% of the voters perceiving that they pay no income tax.

  • Report this Comment On May 27, 2011, at 8:26 PM, PeakOilBill wrote:

    Just think what the Lehman bankruptcy did. Imagine what the USA missing a debt payment would be like. You might not want to be long stocks on that day.

    Get ready to see Obama on prime time TV again, with a big stack of signed executive orders on the desk. Brush up on all the laws concerning Presidential powers during a 'National emergency'. He will be a virtual dictator for a few months, at least. And Commander in Chief of all the US armed forces.

  • Report this Comment On May 27, 2011, at 8:33 PM, rd80 wrote:

    "It's completely within Europe's capacity to manage this in a way with no collateral damage."

    Was Sec Geithner able to keep a straight face when he said this?

  • Report this Comment On May 27, 2011, at 8:47 PM, warrenrial wrote:

    Just another of Obama's hacks.

  • Report this Comment On May 27, 2011, at 8:48 PM, Wojomojo wrote:

    To Maple,

    Bush created this mess not Obama! You are confused!

  • Report this Comment On May 27, 2011, at 8:52 PM, Valrith wrote:

    If Geithner were in jail where he belongs, we'd have far fewer problems today.

    Then again, he'd have been easily replaced by some other idiot who would've made a similar mess of things.

  • Report this Comment On May 27, 2011, at 8:52 PM, ynotc wrote:

    Geitner drank the KoolAid. "The balance between revenues and savings is so important." Thats fancy talk for raise taxes.

    Even if we cut expenditures and confiscated all of the wealth of the top 5% tax payers it would only fund the current level of spending for 1 year.

    We have a spending problem. It that gets under control we can talk about paying down with taxes. Until we balance our budget all of the new taxes in the world will not solve this problem!!

  • Report this Comment On May 27, 2011, at 9:42 PM, wilsonced wrote:

    I find the phrase "It will be a very, very, very small ultimate cost to the taxpayer -- less than $100 billion altogether -" a little disconcerting. But then again, it is a symptom of the problem of those in Washington. They don't care about our money and they have zero accountability.

    Thomas Jefferson was right, we need a revolution every couple of decades to bring us back to where we belong. Government is not our keeper, they are our enslaver.

  • Report this Comment On May 27, 2011, at 11:40 PM, hondamikesd wrote:

    I'm not a huge fan of Geithner either but I'm surprised by the vitriol that I'm reading here. Here's my $.02 on a few of the issues you guys have raised:

    1) The bank bailouts- Ugly but necessary. Am I the only one who remembered what happened when Lehman went under? How about the day that TARP didn't pass and the Dow dropped 777 pts? It's impossible to know what would have happened otherwise but $100 billion seems a small price to pay if it really did stop another depression.

    2) GM bailout- Again, ugly but it beats the alternative. GM is back putting people to work and not strip mined to pay off creditors for nickels on the dollar. If these two went under do you really think that those employees would have seen much in the BK? My bet is that enough of GM's collateral was secured that the retirees wouldn't have gotten much of anything.

    3) Spending/Tax Cuts- Yeah, we need to spend less. But I think taking any new taxes off the table from the get go is kind of ridiculous. I realize that a 3-4% increase on the top bracket resembles a boot stomping on a human face, forever... Also, see the following chart if you're curious where out debt came from, I think TMF actually posted something similar not too long ago: http://delong.typepad.com/.a/6a00e551f08003883401538e9aceda9...

  • Report this Comment On May 27, 2011, at 11:40 PM, mtracy9 wrote:

    Finally a voice of reason. The deluded right-wingers are still saying that trickle-down economics works, even though it produced a record tripling of the national debt under RayGun and a doubling of the national debt under Boy George. In bringing down the deficit, you definitely have to look at the revenue side of the equation. When President Clinton raised the top marginal rate on our whining millionaires and billionaires from 33% to 39%, the result was record surpluses. When Boy George reversed course, the result was again more debt and the Great Recession.

  • Report this Comment On May 27, 2011, at 11:55 PM, riverboy23 wrote:

    wars overseas cost a lot

  • Report this Comment On May 27, 2011, at 11:58 PM, LPatDunn wrote:

    Hello, did you ask Geithner what they are going to do with the money that has been paid back?

    If not, why not?

  • Report this Comment On May 28, 2011, at 12:11 AM, pkluck wrote:

    Newsflash most millionaires and billionaires don't pay income taxes because they don't have w-2 income they have capital gains which is subject to much lower tax rates. I find it disingenuous for people like Buffet to clamour for higher income tax rates when he doesn't pay income taxes (he pays capital gains taxes). I didn't agree with a lot Bush's spending but obama has increased the national debt more in 2 years than Bush did in 8. Tax rates are scheduled to go up in 2013 it won't matter you can't tax those evil rich SOB's out of this mess. Clinton's record surpluses were the result of a non recessionary economy and no wars to fund. obama has decided to escalate the wars which has/will increase the deficits. One more point yes federal taxes are historically lower but deductions have been reduced and the AMT tax is hitting an all time record number of people, also sales taxes, property taxes and state income taxes have never been higher, (as the federal Govt has shifted financial burdens to the individual states)and will continue to increase. The US has a spending problem not a tax problem. Voice of reason my a@@.

  • Report this Comment On May 28, 2011, at 12:28 AM, mtracy9 wrote:

    If you actually were to read Warren Buffett, you would find that he advocates an increase not just on the the top marginal income tax rate, but on the capital gains tax rate, which would directly effect him. The US has both a spending problem and a tax problem -- out of control spending by the Pentagon on foreign military adventures and a non-existent Cold War to the tune of $650 billion per year and historically low tax rates on the super-wealthy and on American corporations.

  • Report this Comment On May 28, 2011, at 12:59 AM, pkluck wrote:

    Agree on out of control Pentagon spending, get out of foreign conflicts and close foreign US bases. The US has one of the highest tax rates in the world on corporations that's not the problem, it drives companies out of the US. Stop focusing on top marginal tax rates, deductions have been severely reduced in the last 20-25 years and the AMT tax has shored up a lot of the reduction in tax rates. Tax cuts that obama extended are scheduled to expire in 2013 for people making more than $250,000, it won't matter you can't tax "evil rich people" out of this.

  • Report this Comment On May 28, 2011, at 1:59 AM, mtracy9 wrote:

    Rich people aren't evil; most are just looking out for number one. George W. Bush inherited a federal budget surplus from Bill Clinton in 2000, when the non-partisan Congressional Budget Office (CBO) had forecast that, at that rate, the debt would be entirely wiped out by 2012

    -- from http://www.reclaimdemocracy.org --

    Corporations are now paying the lowest levels of taxes in the post-World War II era. In fiscal 2002 and 2003, federal corporate incomes taxes dropped to their lowest sustained level as a share of the economy since World War II. Only a single year during the early Reagan administration was lower.

    In 1986, President Ronald Reagan fully abandoned his earlier policy of showering tax breaks on corporations. The Tax Reform Act of 1986 closed tens of billions of dollars in corporate loopholes, so that by 1988, the overall effective corporate tax rate for large corporations was up to 26.5 percent. That improvement occurred even though the statutory corporate tax rate was cut from 46 percent to 34 percent as part of the 1986 reforms.

    In the 1990s, however, many corporations began to find ways around the 1986 reforms, abetted by tax-shelter schemes devised by major accounting firms.

    Effective corporate tax rates then plummeted, thanks to Bush administration-backed tax breaks passed in 2002 and 2003, continued corporate offshore tax-sheltering, and the refusal of the Congress and White House to crack down on even the most abusive inherited corporate tax-sheltering activities.

    Corporate taxes paid for more than a quarter of federal outlays in the 1950s and a fifth in the 1960s. They began to decline during the Nixon administration, yet even by the second half of the 1990s, corporate taxes still covered 11 percent of the cost of federal programs. But in fiscal years 2002 and 2003, corporate taxes paid for a mere 6 percent of federal expenses.

  • Report this Comment On May 28, 2011, at 6:25 AM, tamr666 wrote:

    This guy is a political hack.............

  • Report this Comment On May 28, 2011, at 7:00 AM, TMFMurph wrote:

    ...and the "equal time" or rejoinder to TG's points/postions is .....where....?

  • Report this Comment On May 28, 2011, at 9:01 AM, Darwood11 wrote:

    When Obama was pushing health care overhaul, I sent him a note paraphrasing Clinton "It's the economy, stupid" and suggested he make getting the economy running as job one. We know how that turned out.

    I have little confidence in Washington, and that includes my congressmen or women.

    The economy got this way because of a huge disconnect in the capacity of individuals to earn money and spend responsibly, as in "live within our means." Today we have a debt hangover at all levels. The voters are clamoring for more debt as in "don't take away MY entitlements!" and "Don't increase MY taxes!"

    It's going to take increased taxes AND reduced spending to solve this. I agree with Geithner that it's going to take a few more years for the housing market to right itself. Real unemployment is above 10%.

    I've done the numbers where I live. My condo is priced at 2001 levels. The good news? It's now cheaper to buy than to rent. That's the first time in nearly 10 years. Despite the hoopla to the contrary, according to CoreLogic as quoted in M* April 28, 23.1% of homes with mortgages are underwater in the U.S.; When I ask people what the percent of all homes underwater is, they generally give me much larger numbers, in the range of 50 to 65%! Everyone forgets that about 33% owner occupied homes are owned free and clear (according to the Census Bureau).

    It seems about 15% of the U.S. population is struggling. The rest are doing OK, but are worried. I know, this is an average, and real estate in NV and CA is a disaster.

    I encouraged my kids to develop a long view and get critical thinking skills. I suggest we all do the same.

    Thanks for the article!

  • Report this Comment On May 28, 2011, at 10:21 AM, joeblou wrote:

    If the wealthy don't pay to live in this great country why should they get to fire people and move plants. Enough welfare for the rich. Does anyone really believe government has to give tax loopholes and tax breaks when greed is hot. Make the tax code variable but still balaced. Make grandma pay or die. I say 90% is not too high it would end all the bawling by those too hateful to pay. We need times when it is not all about greed and times when it is. The business cycle has to have time to work but we seem to need to try to circumvent it always. That is not possible.

  • Report this Comment On May 28, 2011, at 11:19 AM, jrj90620 wrote:

    Progressive tax rates would be OK if the ones being taxed were OK with it.If they believe they are unfair,and most do,they will do a lot of things to avoid the tax,which ends up hurting the economy and everyone.Best would be honest taxes,that are low and the same % for all incomes.Get rid of most deductions and simplify.Do Dems believe that sales taxes % should be higher for higher incomes?Is that fair to the "fortunate",who,I guess,Geitner believes didn't work harder or smarter to get rich,just got lucky.Of course, Geitner likely believes in our dishonest fiat currency too.What fools we have for leaders.We would be better with the leaders of China,than the ones elected by ignorant,envious Americans.

  • Report this Comment On May 28, 2011, at 12:54 PM, Mwn560 wrote:

    On Bail-outs and the stimlus, In hind sight, I think The Stimulas package should have gone to main street, a $20k loan to every taxpayer at 0 to .25%, With the condition it had to be used to service debt first. This would have bailed out the banks, I am charged 8 1/2 % on a student loans while the banks get it at 0-.25%. I think that is why the stimulas didn't work. I think over time the government would have gotten 75% of the money back, People would have had a little more to spend, which would have kept employment higher. People with no debt would have spent or invested the money, making the economy move forward faster. I know the stimulas had to be done, however it was done wrong.

  • Report this Comment On May 28, 2011, at 1:53 PM, baa100 wrote:

    Mr. Geitner neglected to mention Plan A, which was to "borrow" federal employees' retirement funds. He has done this to buy a little more time. Borrowing federal employees' money has been done in the past and the government has always paid it back (with interest? maybe not), but then again, the national debt has never been this high before either. We'd better get our money back this time...

  • Report this Comment On May 28, 2011, at 2:17 PM, rocketman67 wrote:

    People who make politics a career are a recipe for disaster. It's been proven time and time again throughout history that it doesn't work but yet we keep making the same mistake.....reelecting the same people who are responsible for the very problems we face year after year.

  • Report this Comment On May 28, 2011, at 3:24 PM, MarinerMark79 wrote:

    Hello my fellow Fools,

    The deepest error many in our republic are making is to think that the purpose of our government is to take care of us.

    "We wanted to hear what the man tasked with tackling these issues is thinking about today."

    No one in government is "tasked" with these issues. Whether we as a people will flourish or wither depends on whether or not we wake up to this fact.

    "I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them." Thomas Jefferson

  • Report this Comment On May 28, 2011, at 4:16 PM, wantingtoretire wrote:

    I read a lot of commentary in response to something someone has said,like this one here. With a very high percentage, the comments are exceptionally derogatory and overloaded with political rhetoric. What is usually missing is any real understanding of the problem(s) and any objective, positive forward looking statements or constructive offering.

    Many people debate that America does not really have any problems that cannot be solved by shrinking government to almost nothing and installing either the left or right party, depending on your personal view point.

    Much of this diatribe clearly demonstrates that Americans do understand how they got to where they are today and the issues confronting them over the next 2-3 years or sooner. It all seems business as usual.

    2007/2008 was just taste of what is yet to come. America, along with other countries is financially unstable. Whether or not America topples no longer depends solely on Americans, although they be doing better at helping resolve the problems than they are. It depends more on the positioning of other countries in the world who are busy trying work out what things would be like for them if America was no longer a large consumer of their products and services. At he same time they are trying to work out how to move in that direction.

    Wake up America...............

  • Report this Comment On May 28, 2011, at 6:46 PM, rickolevio wrote:

    Geithner is a tax cheat running the treasury, that is some starting point. On top of that he is a sheep following the party line. The fox is in charge of the henhouse and he's an idiot.

  • Report this Comment On May 28, 2011, at 8:59 PM, mracz425 wrote:

    A lot of people have forgotten who started the "bailout craze" it was George W. Bush. Not Obama or Tim G. So thank him. Number two since when are the Republicans so worried about the debt and raising the debt ceiling. They sure weren't fiscally responsible under Bush's term. Tim is right its irresponsible and careless not to raise the debt ceiling.

  • Report this Comment On May 28, 2011, at 9:42 PM, MrGrimReaper wrote:

    I see these two authors really ARE fools! How is this rhetoric "refreshing?" This is party line nonsense that Little Timmy the Tax Cheat has been spouting for months.

    The Fed continues to print money and spend money like a bunch of drunken sailors. The economy isn't getting better and the Tax Payers (unlike little timmy) ARE ON THE HOOK FOR IT ALL!

    I don't know if the site moderators read these articles before they are posted, but if I was them, I would pull this article ASAP. This makes Dave and Tom look like idiots and as a first time visitor to this site, I am not impressed. >:/

  • Report this Comment On May 28, 2011, at 10:59 PM, KyleSanDiego wrote:

    Where are people with integrity in government. How can anyone believe what Geitner says?

    He is just a small man who has sold out to his political rookie chicago boss-obama.

    Party - line nonsense is not. It is critically important, and the difference between the corrupt, steam-roller, obama, pelosi, reid, government and what our country could be, is like night and day.....may i kindley say ....fool?

  • Report this Comment On May 28, 2011, at 11:07 PM, steveballmer wrote:

    I have always believed this guy to be a little nuts!

    http://fakesteveballmer.blogspot.com

  • Report this Comment On May 28, 2011, at 11:19 PM, whereaminow wrote:

    This guy is such an unreal piece of garbage, I can't understand why ANYONE would ever care what he has to say.

    David in Qatar

  • Report this Comment On May 28, 2011, at 11:52 PM, grendeth wrote:

    Did anybody see the movie "Inside Job"?. I know it is just a movie documentary but it put into perspective what sort of buffons we have running our financial system.

  • Report this Comment On May 29, 2011, at 2:26 AM, gayledon wrote:

    please don't waste our time with anymore comments from this monumental lightweight, which happens to be the treasurer of the U.S.

  • Report this Comment On May 29, 2011, at 2:37 AM, johnnymiami wrote:

    When your elderly parents, (grandparents) get reduced medicare, YOU will pay for their health care. See how you like tax breaks for the super rich then.

    Geithner had a real mess from lack of sensible controls over our financial system. Partly his fault in the first place, but he had to work with what he was given.

  • Report this Comment On May 29, 2011, at 4:01 AM, SPARTANBURG wrote:

    If Geithner thinks the Greek crises is not "rocket science" then I feel for the guy. It makes his interview and thought process seem like "the Magic Kingdom".

    These guys love to gloss over everything on their smooth speeches so the newspapers have specific "catch phrases" to publish.

    It seems this oversimplification is the way the majority of politicians handle everything around the world. And why shouldn't they?

  • Report this Comment On May 29, 2011, at 7:21 AM, Gurgler wrote:

    Geithner inherited a toxic mess from Hank Paulson . And appears to have made fewer mistakes than his predecessor . He didn't get everyting 100 % correct , but then who does , Alan Greenspan , the " maestro " ....... aha de ha ha . ....... " helicopter " Ben Bernanke ... yuck , yuck !

    ....... when he's not appearing on " South Park " , as the kid in the wheel-chair , Timmy is doing a good enough job as Treasury Secretary . ...

    ... TIMMY !!!

  • Report this Comment On May 29, 2011, at 8:11 AM, slegl516 wrote:

    his answer is ti Punish the successful. Not learn how they became successful. How many people are employed by these 400 richest people?

  • Report this Comment On May 29, 2011, at 8:47 AM, proplumb wrote:

    There was no tax cuts for the rich. Obama signed a 2 year extension on the bush tax reduction for everyone. The Dems are apinning this into a tax cut for the rich. The Dems voted for the extension.

    Don't people pay attention?

  • Report this Comment On May 29, 2011, at 9:43 AM, tonfifty wrote:

    There's not a revenue problem, there's a spending problem. Fed Govt should be about 18% of the GDP, not the 24+% Obama wants himself and his Czars and his unions to control.

    I am sick and tired of the term "most fortunate" Americants. How about, "most productive" Americans, "hardest working Americans", "most talented" (and therefore highly compensated) Americans.....

    you sorry a** Tax Cheat!

  • Report this Comment On May 29, 2011, at 11:19 AM, glennvaughnjr wrote:

    cleverly prepared bull

    H.E. Hitzem

    Saluda, NC

  • Report this Comment On May 29, 2011, at 12:26 PM, surfgeezer wrote:

    Well articulated article.

    Comments above mostly show the disconnect from reality most partisans have, and why I have so little hope. Fans don't care about facts.

    Most Americans like to hear news slanted toward their personal beliefs and would rather watch TMZ than do any critical thinking. BOTH so they can feel better about their OWN bad decisions.

    Yes the man made a mistake on his taxes, he still knows more about finance than any one posting here, but it does not matter what he says. Americans apparently think they need to be led by some saint and not surprisingly this world has few. It does have a lot of smart people that refuse to be part of the political process because of the attacks, and frankly I do not blame them.

    You are getting what you deserve America. Most are credit addicted and want the "best" at Walmart prices- good luck with that.

    Wave your stupid red or blue flag as this ship goes down,Truly sad

  • Report this Comment On May 29, 2011, at 1:00 PM, TMFDiogenes wrote:

    "I see these two authors really ARE fools! How is this rhetoric "refreshing?"

    "The Fed continues to print money and spend money like a bunch of drunken sailors. The economy isn't getting better..."

    "I don't know if the site moderators read these articles before they are posted, but if I was them, I would pull this article ASAP."

    - It's "refreshing" because he was, indeed, pretty frank in his responses.

    - Yeah, multiple editors read articles before they are posted.

    - It's always nice to see when people think that just because they disagree with someone, an interview, say, with the Treasury Secretary of the United fricking States is unworthy for publication.

    - For the record, I'm not a fan of how the Treasury is handling the recovery either (for different reasons probably), but as we were invited to an interview, we thought it would be interesting to give Fools access to how one of the guys running the economy thinks. Sorry if opposing perspectives bother people.

    - I'm also not a fan of everything the Fed has done (too friendly to the banks). But the Fed doesn't spend money -- it engages in monetary, not fiscal policy. And QE2 ends in June, so they aren't "continuing" to print money like drunken sailors. And unless you're going to explain for us your theory about why expansionary monetary policy at the zero-bound is unhelpful for expanding the economy, complaining about expansionary monetary policy and an insufficiently expanding economy in the same breath appears, at least on its face, incoherent.

    - One commenter wrote: "Wave your stupid red or blue flag as this ship goes down." We're facing actual problems today, so it'd be great if we could engage each other in actual conversation about solutions to those problems instead of hyperbole, delegitimization, and personal attacks. Not that there's anything wrong with blowing off steam -- but everyone will get more out of these comments if we provide a rationale for our thoughts, or if they're not logical, we can at least make them original or funny :)

  • Report this Comment On May 29, 2011, at 9:02 PM, burrowsx wrote:

    You have purposely avoided several important questions:

    1. With the toxic assets still on the books of most surviving financial institutions, still valued at 100% despite the fact that many of the assets are no longer solvent or paying, how and when are these assets going to be written off? Is Treasury or the Fed going to make regulations to accomplish this write off?

    2. If "Dark Forces" are conspiring against the Obama administration, as you describe, isn't it about time Treasury and the Attorney General made some pre-emptive strikes, to assure your integrity?

    3. Why are military and homeland security expenditures less discretionary than Food Stamps or Early Childhood Education?

  • Report this Comment On May 30, 2011, at 7:49 AM, JasondinAlt1 wrote:

    Only in America can we characterize $100 Billion as a "very, very, very small cost."

  • Report this Comment On May 30, 2011, at 12:12 PM, jdmcccullough wrote:

    I think my high school kid could have said the same thing!! Are we at a point in America where we listen to this mediocre comments and just say well we got to tighten up because the gov. wants more of those who do to give to those who don't. So lets get real here, if gas, utilities, food are putting a dent in my budget and then comes along the tax man ands say look buddy your doing great, working hard, living life, we want you to spend to get the economy going but first we want more of your money up front to give to these programs that have great value for some people and the great part of this plan, is you will still have some money left, maybe! This is junk!! We need to clean house in Washington and that includes the congress, who is conning us daily!!

  • Report this Comment On May 30, 2011, at 12:19 PM, menudomighty wrote:

    Obama's worst appointments are/were Tim Geithner, Larry Sommers, and Ben Bernanke. All three played significant roles in the deregulation of the banks and Wall Street. Since the "crash" their decisions have shown that enabling the economic meltdown in the past is no indication that they have any idea how to fix the economy going forward. Obama's next failure was in not doing everything he could to put Hank Paulson in jail for orchestrating the AIG bailout so they could in turn pay Goldman Sachs (his former employer and a thinly disguised criminal organization in my opinion) the $14 Billion in insurance bets it made against the AAA-rated crap it foisted off on its customers.

  • Report this Comment On May 30, 2011, at 12:51 PM, TMFDiogenes wrote:

    @burrowsx

    We unfortunately didn't have the opportunity to ask those questions (the interview was conducted by Politico.) "Dark Forces" was the interviewer's language to describe financial lobbyists and their allies in Congress. I think we're in agreement on the issues you raised.

    http://www.fool.com/investing/general/2010/05/17/61-senators...

    http://www.fool.com/investing/general/2010/12/21/rising-star...

    Ilan

  • Report this Comment On May 30, 2011, at 8:12 PM, steveballmer wrote:
  • Report this Comment On May 31, 2011, at 1:16 AM, rpavellas wrote:

    I ask, sincerely, where would the economy be if Fannie Mae and Freddy Mac were never invented by the politicians? And. it was apparently decades ago that GM was in trouble because its labor costs per unit were 'way above its competition. I blame management. The stupidity of any organization, public or private, is correlated positively with its size.

  • Report this Comment On May 31, 2011, at 11:41 AM, Gato337 wrote:

    Why isn't anyone moderate anymore? Where are the independents? Has the middle of the road been completely washed out by these repeated floods of selfish partisan rhetoric?

    Geitner hints at the solution, but doesn't make it clear enough. Its about BALANCE. We will all have to sacrifice and work together to get out of this hole, REGARDLESS of who got us into it (Obama? Bush? Pelosi? Wall Street?)

    EVERYONE needs to give a little if we are going to save our beautiful Country from its current course of destruction. This blame game is getting us nowhere.

    1) Our expensive entitlement programs are currently unsustainable, they need to be restructured and new tighter regulations put in place to reduce waste and ensure that money is spent where it will create the greatest benefit. (like allowing cost/benefit ratios to be a factor in whether or not Medicare/Medicaid will pay for medical treatment - is spending $50,000 to extend the life of an elderly colon cancer patient by 2 months a good idea when that money would be better spent on a 17 year old leukemia patient to help him live 20 more years?)

    2) the top tax bracket needs to suck it up and accept higher tax rates. I know that the wealthy already account for the majority of federal revenues, but paying a few % points higher in taxes isn't going to make you starve. At the worst, you'll have to downsize your home from a 5,000 sq ft to 2,500 sq ft (TRAGEDY! I cry for you). Just consider that the benefit cuts to wellfare could make a family of 5 leave their tiny 2 bedroom apartment for a homeless shelter. You have to think about these things proportionately - have some compassion.

    3) Corporations need to stop abusing loopholes in the tax code. (it would be even better if those loopholes could be closed by some new regulation). As investors, we should try to reward companies that truly embrace the idea of Corporate Responsiblity. The whole lobbying business needs to be reigned in even tighter. Even though strict regulations are already in place - Congress is still run by whoever has the most money and influence and little is done to penalize those who are found to be abusing the system.

    In conclusion - please people, let us find some BALANCE. This recession hurts and our huge deficit is going to be salt in the wound for the next 50 years if we are not careful. Everyone is going to have to sacrifice if we want to get out of this.

  • Report this Comment On May 31, 2011, at 12:15 PM, steveelcpo wrote:

    Indicative of the intelligence levels of the Obama administration. Remember the lowest 50% in the US pay no income tax at all, yet Geithner (who didn't pay his taxes) thinks it's ok to charge more to those who work hard, take risks, and are successful!??

    As to "not a credible negotiating strategy", the US government is SO big and SO out of control that the Administration and the Democrats in the Senate have to be willing to give up some things too. Remember Harry Reid not wanting to give up his taxpayer funded cowboy poetry festival? Remember Obama saying that the $450 going to public broadcasting (that an NPR executive in a moment of candor said they could do without) was a "vital part of his budget"? Geithner is political hack of the Obama administration and is only going to give his partisan views. Bottom line, zero credibility.

  • Report this Comment On June 01, 2011, at 8:29 AM, MrChapel wrote:

    As a Dutch citizen, I have to agree with most views expressed here.

    "On the Greek crisis

    It's completely within Europe's capacity to manage this in a way with no collateral damage. It's not expensive. It's complicated, but it's not rocket science."

    This response is so naive, I can't believe it comes out of the mouth of the Treasury Secretary of the United States.

    First of all, Mister Secretary, the expense is pushed squarely on the citizens of the European nations that have absolutely nothing to do with Greece. Who do you think pays the money used in the bailout rounds, both the first one and the second one coming up? Not the governments of Germany, Netherlands etc. No, they just TAKE the money from their citizens through taxes that are meant for other programs WITHIN the individual countries, thus taking away from any recovery in whatever sectors that lost the money.

    Secondly, the collateral damage? How about the fact that in the Netherlands, the retirement age has been raised from 65 to 67 AND that there's talk of raising it to 70, while Greece still is at 53 AND nobody there is willing to give up a damn thing. Or have you not seen the massive demonstrations, strikes and firebombings? How about Portugal's government stepping down because the opposition isn't willing to accept any sort of entitlement reform?

    How about the fact that there is serious talk about cutting the Greek debt, which would impact every financial institution in Europe? Wouldn't that be considered collateral damage? If those institutions lose billions on those loans, how does that impact their profitability and ability to finance individuals, companies and countries that do have their financial house in order?

    How about the fact that thanks to the problems in Greece, Ireland, Portugal, Spain, Italy and now Belgium, pension funds have to up their liabilities, forcing us, the common people to pay EVEN more into our mandatory accounts. Even so, they claim we'll be lucky to get the promised payout.

    I could go on but I won't. Anybody who defends Timothy Geithner's remarks is a fool themselves. The above mentioned quote alone is enough to disqualify him from any serious consideration. I'm sure he thinks the situation in places like California, New York and other financially unstable US states is not a big problem. We'll just tax the productive people more. Funny thing is, the productive people pack up and go to other states/countries that reward them for doing business there.

    As for his Plan A/B/C/D regarding the debt ceiling, unless you're an idiot, you KNOW that raising your debt to get out of debt is an idea on the scale of building an ice castle in the desert.

    Start by capping spending. Shut down unnecessary and duplicate government agencies (like this one http://pajamasmedia.com/blog/a-superfluous-federal-agency-is....

    Institute comprehensive tax reform.

    End 'Kinetic Military Action' on behalf of your allies. If they don't have the 'unique abilities' the US military has, they should damn well pay for it themselves to acquire those abilities.

    Repeal the boondoggle that is the "Affordable Care Act". It doesn't work, since here in the Netherlands, we have our own version of it. EVERYBODY is mandated to have it. It was supposed to be cheaper. In the six years it's been implemented, yearly price increases of between 9 and 13 percent are the norm. Also stupidity. Example: as a male, I don't need pre- and post-natal care. Yet it is in the mandatory package. I can not transfer it to my wife/girlfriend as she also has it in her mandatory package and the hospital will use her insurance. The only ones who can use it, is our daughter until she's 18. Of course, we'll need to decide on which of our insurance carriers we'll put her or any other children we have. You need an operation? Let's check the waiting list. Anywhere from six months to longer before we can schedule you. We are probably the only country where insurance companies are advertising with waiting list negotiation. Is it a wonder many who need an operation travel to Belgium or Germany to get it done? But I'm sure Obama-care is much better, right? Health insurance reform is necessary so do it in such a way insurers are allowed to work all across the US since I understand they're not allowed to now.

    Put back the repealed provisions of Glass-Steagal. Or at the very least, break up the monster banks like at one time Ma Bell. Better yet, do both.

    And for *put deity of your choice here*, kick idiots like Rafe Solomon of the NLRB out. Suing a company because they're creating jobs in a Right-To-Work state while at the same time creating union jobs? Has anyone checked their blood alcohol level or for any form of substance abuse?

    And since we're on the subject of unions, union reform. No more forcing people to join a union if you want to work. I am a union member. I work in a team of 12 people at a global custody desk. Half are union, spread over three different unions. The three unions work together to get the best deal for ALL workers, not just the union members. Non-union members don't pay anything for that. They're not forced to join. Sounds to me like the US unions are still in the hands of the Mob and they have their hands in the pockets of the politicians who support them.

  • Report this Comment On June 01, 2011, at 8:32 AM, MrChapel wrote:
  • Report this Comment On June 02, 2011, at 6:07 PM, livinglearning wrote:

    And yet , we still have some of the highest corporate tax rates in the world. In my view, we lower corporate tax rates, close the loopholes, stop the corporate welfare on ALL (yes, including the "green" technologies, oil, farm subsidies, etc.) and increase the income and capital gains tax rates. You can achieve increased revenues as well by simply cutting out a lot of the current deductions starting w/ mortgage interests. We also need more than 53% of the population paying some federal taxes even if it's minimal.

  • Report this Comment On June 02, 2011, at 10:20 PM, Rarusnans wrote:

    The Republicans here in the USA should group into one nation and have Bachman or Palin run it. I know, it`s a cruel thought, but their utter stupidity deserves just that. )(

  • Report this Comment On June 03, 2011, at 2:01 PM, mahatchma wrote:

    GIven the propensity of the WH and its minions to indulge in terminological inexactitude (to quote Churchill) why would you beleive a word of what Geithner said?

  • Report this Comment On June 03, 2011, at 4:47 PM, GeorgeDoyon wrote:

    All of his comments are not based on truism.

    Liberals just can't seem to tell the truth!! He can't cut spending (Or doesn't want too.) & we are headed for a Grecian Bankruptcy if we do not cut spending. Just cutting all the duplicate & useless agencies will trim millions from the budget. There are many, many ways to cut spending & we would never miss or be hurt by the cuts.

    He just thinks TAX THE RICH!! We are all rich,(Ha, ha!) so they will just tax us all!

  • Report this Comment On June 09, 2011, at 8:44 PM, madlyn42 wrote:

    To Mr. Geithner,

    Our problems started during the Clinton years, with the intoduction of a bill allowing banks to lend money to poeple who had no ability of ever paying it back.

    Mr Buffet had the correct reasoning in dealing with the officers of the banks that took a bail out. Each and every officer was to be left penniless and each and every board member was to give half the fee, based upon rubber stamping.

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