Ben Bernanke vs. Tim Geithner.

July 27, 2010

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner have been the bailout and reflation amigos for going on three years, but in the last week we saw the first signs of a policy divorce.

Last week before Congress, Mr. Bernanke endorsed a continuation of the 2001 and 2003 tax rates that expire in January. “In the short term, I would believe that we ought to maintain a reasonable degree of fiscal support—stimulus—for the economy. There are many ways to do that. This is one way,” he said.

Mr. Geithner may not have liked what he heard from his compadre, because he hit the Sunday talk-show circuit saying that raising taxes on individuals making more than $200,000 is just what the economy needs. “We think that’s the responsible thing to do because we need to make sure we can show the world that [we're] willing as a country now to start to make some progress bringing down our long-term deficits,” he said on ABC’s “This Week.” The Treasury man said this huge pending tax increase wouldn’t matter a whit to economic growth.

Read more at: http://online.wsj.com/article/SB10001424052748703700904575391573478916924.html?mod=WSJ_Opinion_AboveLEFTTop

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