Friday, September 3, 2010


Timothy Geithner is the Secretary of the Treasury. Eternal Optimist will call him Timmy, since he is starting to bug me.

Timmy recently said that letting Bush tax cuts expire - they had a "sunset" provision when passed - would be the "responsible" thing to do, since the higher taxes would help balance our budget and send a message that we are serious about getting control of the deficit.

Timmy said extending the Bush tax cuts would be "irresponsible," and would actually hurt the economy, because bond investors would think we were not serious about deficit control. Letting the tax cuts expire brings in an estimated $700 billion in taxes over 10 years, says Timmy. About $70 billion a year.

BTW, letting "tax cuts expire" is the same as "increasing taxes." We'll just call it tax increases (what it is) from now on.

And double BTW, having just burned through about $900 billion in debt for "economic stimulus" while having no effect on joblessness is fine, okie-dokie, no problema, good for America. Never mind the moon-sized hole you just blew in the budget in 2009, the generations of interest payments you just laid on my children.

And FYI, the jobless needle is still stuck on "E" - 10%. No movement for that $900 billion we just forked over in 2009. Still driving on fumes.

And double FYI, this budget fart was $900 billion in ONE YEAR, not over 10 years. So triple FYI, investors already know Timmy's views on "deficit control," and spraying some air freshener around is not going to make the smell go away.

We will call this "Timonomics." Under Timonomics, when you increase the deficit by borrowing $900 billion, that is good, and opposition is irresponsible. When you reduce the deficit by raising taxes, that is also good, and opposition is irresponsible. Heads Timmy wins, tails you lose.

The only way to make sense of Timonomics is to realize that in both cases government gets more power - that is, more money.


It is one thing to insist that government needs to get bigger, no matter what. It is quite another thing for Timmy to pose as fiscally prudent while Super-Sizing the government's beer belly. The first is a straightforward political position that I happen to disagree with. The second is a fraud scheme.

Call Popeye Doyle, please.

I had a friend, an old criminal investigator from Virginia. He had a great expression for this:

"Don't piss in my ear and tell me it's raining."

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