Geithner Attacks Austerity

Treasury Secretary Tim Geithner will caution austerity measures taken by, or perhaps forced on, many European nations could undermine any recovery there. In comments to the House Financial Services Committee, he will say “If every time economic growth disappoints, governments are forced to cut spending or raise taxes immediately to make up for the impact of weaker growth on deficits, this would risk a self-reinforcing negative spiral of growth-killing austerity.” He made related remarks about the US economy last week–comments which were probably aimed at a Congress anxious to bring down the federal budget deficit at the expense of jobs and infrastructure expansion programs. Geithner have made comments to EU leaders before, usually aimed at advising them about what is best of their economic futures. He has always been told to take care of US problems before he lectures them.