Five weeks ago, on February 8, Bloomberg.com brought us assurances from Treasury Secretary Timmy Geithner concerning the stability of the U.S. debt rating.

Treasury Secretary Timothy F. Geithner said the U.S. is in no danger of losing its AAA debt rating even though the Obama administration has predicted a $1.6 trillion budget deficit in 2010.  “Absolutely not,” Geithner said, when asked in an ABC News interview broadcast yesterday whether a downgrade is a concern. “That will never happen to this country.”

Geithner stated that, as soon as unemployment declines, “the U.S. plans to rein in the deficit.”  This assurance came, of course, in the midst of a push to pass healthcare legislation that guarantees to increase the national debt, but who’s counting?  With economic growth coming over the next four years, the former New York Fed president said five weeks ago that deficit reduction “is within our capacity to do.”  Capacity differs from intent, though.

Today, there’s another Bloomberg.com story about the U.S. bond rating.  It’s entitled “U.S., U.K. Move Closer to Losing Rating, Moody’s Says:” (more…)

TIME magazine’s Eric Heinrich offers his readers a Hobson’s Choice concerning the mounting federal debt. You accept hyperinflation, or, you pay a lot more taxes. Your choice, but either way you pay. And that’s just one more piece of evidence that proves that today’s legacy media is replete with economic illiterates.

Heinrich’s article entitled “How High Could the U.S. Tax Rate Go?” appears in the magazine’s March 3, 2010, issue.  Here’s a summary of its 633 words offered in 25: The Obama Administration’s “monster deficit” will either result in hyperinflation – by printing money – or higher taxes. The amount and means of levying higher taxes is the question.

Hiking taxes is the less traumatic course, though it will only be accepted as the cost of inaction rises. “Congress only responds to financial crisis or some other external shock,” says Bill Gale, co-director of the Tax Policy Center in Washington. “Nothing will be done in Obama’s first term to substantially increase tax revenue.”

He doesn’t mention the inevitable event of both happening, since they would. When money is worth less the government has to tax more to just keep even. Duh.

In closing, Eric glances toward Britain: (more…)