Geithner To China: Fiscal Sustainability to be Based On Health Care Cuts

June 4, 2009 (LPAC)—Treasury Secretary Timothy F. Geithner has just finished his trip to Beijing where one of his tasks was to convince/persuade the Chinese to continue to invest their trade surplus in U.S. Dollar assets, especially Treasury securities.

Leading Chinese figures, from President Hu Jintao on down, have publicly questioned the stability of the dollar due to the massive stimulus and bail-out packages put in place by Washington to defer the final collapse of the financial system.

The public portion of Geithner's sales job to the Chinese was his speech at Peking University in Beijing, where he had been a student in 1981 (as his father was setting up the first Ford Foundation establishment).

While not spelled out in so many words, Geithner promises that the U.S. dollar will kept strong through American austerity.

There will be austerity in American consumption: "In the United States, saving rates will have to increase, and the purchases of U.S. consumers cannot be as dominant a driver of growth as they have been in the past." The increase in savings is to be compulsatory not voluntary, "The President has also proposed steps to encourage private saving, including through automatic enrollment in retirement savings accounts."

There will austerity in Goevernment "as soon as recovery is firmly established, we are going to have to bring our fiscal deficit down to a level that is sustainable over the medium term. This will mean bringing the imbalance between our fiscal resources and expenditures down to the point — roughly 3% of GDP — where the overall level of public debt to GDP is definitively on a downward path."

And, most definitely, there will austerity in health care: "critical to our long-term fiscal health, we have to put in place comprehensive health care reform that will bring down the growth in health care costs, costs that are the principal driver of our long term fiscal deficit."

The stability of the U.S. dollar, Geithner tells the Chinese will be built on American Fascism!