Treasury Secretary Geithner speaks this afternoon at the liberal Center for American Progress. His staff have released two quotes to the press:
Secretary Geithner: Ultimately, fiscal policy is about getting the conditions right for economic growth, prosperity, and job creation. Over the past two decades, Washington ran an experiment on that front. In the 1990’s, the government put an end to budget deficits, and America enjoyed a period of growth led by the private sector where prosperity was widely shared and job creation was robust. Over the next decade, Washington tried a new path, running up huge debts, while incomes for most Americans stagnated and job creation was anemic. We are living today with the damage that misguided policy caused.
So, as we look to a new decade, there’s some empirical evidence around what works and what doesn’t. Rather than creating a false prosperity fueled by debt and passing the bills on to the next generation, we need to restore America to a pro-growth tax and fiscal policy, where the middle class once again has a chance to prosper.
Secretary Geithner: Borrowing to finance tax cuts for the top two percent would be a $700 billion fiscal mistake. It’s not the prescription the economy needs right now, and the country can’t afford it.
It’s disappointing to see this from Secretary Geithner, whom I see as the least partisan member of the Obama economic team. Tradition suggests I should respond by engaging on the other side of the Secretary’s partisan comparison. This is not, however, a debate between two economic philosophies, but instead a debate among three: Clinton, Bush, and Obama. The Secretary makes an important mistake by suggesting that the Obama Administration is returning to the fiscal policies of the Clinton Administration.