Geithner in Davos: Don’t Cut Government

Geithner said there was a growing recognition that the United States’ fiscal position is unsustainable and increasing political will to put it back on track.
“Political will is not fully manifest at the moment but it’s coming, there’s no alternative to it. We can’t grow our way out of it,” he said.
But he added the country should avoid cutting spending too deeply in order not to hurt the recovery.
“I know there are people who would like to make very deep cuts that would undermine the recovery,” he said.

First, we in the West must put our own houses in order. Physician, heal thyself. The most important steps we can take for our influence abroad are those we take at home. We have lived for decades with a paradigm of progress, in which each generation would be better off than the last. Now we’ll be hard put to ensure that our children are not less prosperous, less secure and less free than we were.

Second, we probably have to scale down — at least for now — our expectations for those shared norms. This means making hard choices. Do we put the preservation of peace, in the minimal sense of the absence of major war, before all else? Or reversing global warming? Or keeping open the pathways of international trade and finance? Or speaking up for basic human rights? Of course we want all these good things. But we have to cut our coat to suit our cloth.