Treasury Secretary Tim Geithner appeared this morning on several shows to spin yesterday’s market-rattling S&P downgrade of the U.S. economic outlook. The causes of the downgrade–the soaring deficit, groaning national debt, and political disagreement over how to tackle both–did not dampen his take on the situation. On the contrary, the fact that everyone’s talking about the problem, Geithner said, shows we’re making progress.
“If you listen carefully, the prospects of [deficit reduction] are better today than they’ve been in a long period of time, because people are saying that this is important to do for the economy and we have to start now,” Geithner said. He also said that, by an apparently fortuitous combination of political and economic timing, now was just the moment to begin phasing in budget balancing discipline.
Of course Geithner didn’t provide sufficient detail about negotiations between the White House and Congress or the deliberations of the so-called “Gang of Six” for anyone to feel particularly optimistic. The Gang of Six is so burdened with representatives of party leadership it is hard to believe it can actually make progress.
Geithner did endorse the idea of “concrete targets for deficit reduction and savings with a clear time frame for bringing those into place with a credible enforcement mechanism.” That is an idea markets would welcome. Unfortunately, he watered it down in the next breath: “Where we can agree on specifics, we should do that too. But we don’t have to agree on everything to start that process.”