S&P downgrade showed ‘terrible’ judgement: Geithner

The White House said Treasury Secretary Timothy Geithner is staying on as US Treasury secretary © AFP/File Nicholas Kamm

AFP

WASHINGTON (AFP) – Treasury Secretary Timothy Geithner slammed Standard & Poor’s for “terrible judgement” in downgrading the US credit rating for the first time ever and assured investors US Treasuries were as safe as ever.

“I think S&P has shown really terrible judgement and they’ve handled themselves poorly, and they have shown a stunning lack of knowledge about basic US fiscal budget math, and I think they came to exactly the wrong conclusion,” Geithner said in an interview with NBC News and CNBC.

His comments came amid growing suspense over the impact on world financial markets of S&P’s downgrade of US Treasuries from AAA to AA+.

But Geithner stressed that the US economy remains strong and resilient, and its credit worthiness unchanged by the S&P downgrade.

“There is no risk the US would never meet its obligations. We’ve got some challenge ahead of us, but we’ll be able to work through the challenges. We’ll get through this,” he said.

Earlier, the White House said Geithner was staying on as US Treasury secretary even as some Republicans called for his resignation in the wake of the downgrade.

“The president asked Secretary Geithner to stay on at Treasury and welcomes his decision,” said White House spokesman Jay Carney.

It put an end to speculation that Geithner would step down after an intense two and a half years in office that saw the US economy plunge into its worst recession since the Great Depression.

In the television interview, Geithner took exception to S&P’s focus on the deep bipartisan divide in Washington over fiscal policy, saying, “Our country is much stronger than Washington.

“We have a very resilient economy. We’re a very strong country, and I have enormous confidence in the basic regenerative capacity of the American economy and the American people,” he said.

He acknowledged that economic growth was slowing, creating challenges for both the United States and Europe that have “made people wonder.”

“I think you’re going to see Europe step up and do what is necessary to help support the countries in Europe under the most pressure,” he said.

“I’m very confident in this country and the capacity of this country and even this political system, damaged as it looks, to come together and try to make more progress in these long-term challenges.”

On Saturday, Republican Senator Rand Paul called on Geithner to step down for what Paul’s office called a “gross mismanagement of federal economic policy” and his role in the credit downgrade.

US congresswoman Michele Bachmann, a Republican candidate for president in 2012, also called on Geithner to resign.

Washington has been split over how to reduce its more than $14 trillion debt without further hobbling the sluggish economic recovery, and even the limited debt deal came after a bruising partisan battle.

Geithner has been Obama’s sole treasury secretary, installed in January 2009 at the beginning of Obama’s presidency.

© AFP — Published at Activist Post with license