US bond rating under threat

Tim Geithner

Yesterday saw Treasury Secretary Timothy Geithner announce that the US wasn't in danger of losing its triple-A bond rating, despite a warning to the contrary from Moody's Investors Services.

Geither's defiance came as part of an interview with ABC News's "This Week" program and saw him arguing that this "will never happen to this country" when asked about the prospect of the US losing its top rating.

He was quizzed over the issue after Moody's, the bond rating agency, announced on Wednesday of last week that the US could soon be stripped of triple-A ratings of treasury bonds unless the government is either able to reduce its federal budget deficit or the economy recovers.

Basic confidence

Despite this though, Geithner believes that, when investors were nervous about a glob

al financial crisis, they sought safety in US Treasury securities and the US dollar. Geithner now calls this "a very, very important sign of basic confidence in our capacity as a country to together to fix these problems."

In fact, according to reports in today's Wall Street Journal, Geithner has expressed how the Obama administration has proven that it is "deeply serious" about deficit reduction. Geithner himself, for instance, has endorsed the creation of a bipartisan commission that would be charged with recommending ways to reduce the federal deficit over the long haul.

However, Geithner did admit how economic recovery "is going to take a while", adding how recovery will be "uneven." He also highlighted how, while the risks of a double-dip recession are much lower than they have been, he said, "we have more work to do" to spur job creation.

"We have an economy now that's growing again," he optimistically suggested. "With growth, you're going to see jobs created."

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