Here's Obama and Tax Cheat Timothy Geitner in essence committing the United States to Bail Out Europe against the will of the American People and trying to keep it all quiet...and in fact twisting the facts and lying to the American Public about what is happening.....It's been a clear message to Obama...NO MORE BAILOUTS!, but he doesn't listen...he thinks he knows better.
IF he were to get reelected we would again see this country's debt rise tremendously and we would end up like Greece....He's a dangerous person..he's not straight with the American People and he has to go in Nov 2012....
Two Audiences, Two Messages for White House on Euro Bailout; Obama, His Presidency Stalled, Invokes TR’s Activism
Geithner Seeks to Reassure Europeans, But Not Anger American Voters
"[The European credit downgrade warning was] prompted by our belief that systemic stresses in the euro zone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the euro zone as a whole."
-- Statement from Standard and Poor’s Ratings Services explaining its newly negative outlook for the government debt of 15 nations, including Germany, France, Holland and Austria.
The French and Germans are trying to drag the drowning southern European nations back to the boat and are asking Britain and the U.S. to jump in and help them pull.
But as Treasury Secretary Tim Geithner tours the continents in a bid to express confidence in the ability of debt-drenched Europeans to save themselves and to restate American promises of support, the political perils for him and his boss, President Obama, are very real.
German Chancellor Angela Merkel is pushing for a new version of the 19-year-old European Union that would give the central government in Brussels more power over the finances of member nations. There are 27 nations in the EU – essentially all of Europe except Switzerland and Finland, who didn’t want in, and the Balkan countries, which couldn’t get in. There are 17 countries that agreed to give up their currencies to join the euro and 10 EU member countries that refused, including Britain, Sweden and much of Eastern Europe.
Merkel is in huge political trouble at home because Germans, who, along with the Dutch, have seen their currency status trashed since joining the euro in 1999 as the Greeks and other spendthrift nations with weak economies have failed. Merkel’s offer to voters is that the Germans and industrious northern peoples would have substantial control over the continents finances – she argues that it can be fixed, but only if the Germans can spank their southern neighbors for fiscal indiscipline.
This new era of Teutonic control appeals to Germans, but perhaps not as much as doing what Brits did off the bat: tell the poorer countries and their funny money to sod off. But Merkel is also feeling the pressure from French President Nicolas Sarkozy, whose country is in a multi-generational economic malaise and much closer to the debt abyss. He can’t stay afloat without Germany and Germany can’t get the fiscal controls it wants without his assistance. Plus, she knows that Germany can only stay solvent for so long if all its neighbors slide back to Second World status.
It was once thought that the Europeans might be able to muddle through in the way that Americans have been doing on debt, but with a weak currency, a much smaller economy and no real central bank or unified fiscal control, that has proven impossible. Europe doesn’t have a currency problem so much as it has an economic problem. With dire forecasts for growth and without the military/geopolitical standing to bluff its way through currency scares, they’re in for hard times no matter what.
What Merkel and Sarkozy are now pitching is for Britain and the rest of the euro refusniks to join in a new treaty that gives the Brussels government greater fiscal control of member state finances with an eye on expanding the number of nations keeping the currency buoyant. That sounds incredibly foolish to Brits who are just now busy congratulating themselves for not going into the euro in the first place.
That would leave the 17 euro nations, or whichever of them agree to cede budgetary control to Brussels – essentially leaving every German and Dutch worker with a half dozen Greek, Italian, Spanish, French and Portuguese debtors on their backs. The trends line is increasingly looking like a checkerboard continents with currency and treaty confusion even worse than before the original treaty. It’s got a Hapsburg kind of vibe.
But as awful as that sounds, not even that outcome is possible unless the Chinese, the U.S. and other nations with the ability to conjure money agree to finance the European reorganization. Consider Merkel and Sarkozy like borrowers looking for another loan at the local bank just ahead of a bankruptcy declaration. Only another loan can prevent failure and a total loss, so a Power Point is assembled and promises of lessons learned and new policies to be implemented are made.
Europe is America’s most important trading partner and our banks are heavily entangled with those of our cultural parents, so the Obama administration is direly worried about the fallout over here if there is a sudden meltdown over there. With the American economy stalled the administration believes that propping up Europe is essential to another round of recession here. As Vice President Joe Biden famously said, once “we have to go spend money to keep from going bankrupt.”
The Federal Reserve has already obliged Europeans by keeping the spigot of cheap dollars open for Europe for another year, essentially allowing Europeans to swap their bad currency for our greenbacks at a deeply discounted rate. This cheered investors until Standard & Poor’s reminded everyone on Monday that Europe was truly hosed, it was just a matter of how soon and how badly.
The bailout package Europe is now seeking would rely on the International Monetary Fund, of which the U.S. is the most important part. So even if Obama does not actually present Sarkozy and Merkel with a giant check on behalf of U.S. taxpayers, he will be putting his country on the hook and increasing the long-term contagion risk. This is like a bailout version of Libya in which he will applaud the leadership of other countries while simultaneously making the whole thing possible and paying the most. It would be like the U.S. co-signing a loan with the 17 euro countries for more cash from China, but knowing full well that the euros can’t make the payments.
This is a good political blame-deflection strategy for Obama, but it tends to leave Europeans and panicky investors confused. So Treasury Secretary Tim Geithner is back in Europe to calm nerves and provide assurances that the U.S. will foot the bill that Obama can’t offer for domestic consumption ahead of an election in which voters are bailout averse and not exactly great fans of European interdependency, or Europe for that matter.
At a moment when the whole European experiment dangles on the thin cord of public confidence in international unity in debt, Geithner’s job is to let everyone know that Uncle Sam is on board, but to say it softly and complexly enough so that American voters don’t hear it.