Treasury Secretary Timothy F. Geithner said the U.S. is in no danger of losing its Aaa debt rating even though the Obama administration has predicted a $1.6 trillion budget deficit in 2010.

“Absolutely not,” Geithner said, when asked in an ABC News interview broadcast today whether a downgrade is a concern. “That will never happen to this country.”
Moody’s Investors Service Inc. last week said the U.S. government’s bond rating will come under pressure in the future unless additional measures are taken to reduce budget deficits projected for the next decade.

Geithner said the risk of a “double dip” recession in the U.S. has declined, particularly given recent reports showing the economy grew at a 5.7 percent pace in the fourth quarter of last year.

“We have much, much lower risk of that today than at any time over the last 12 months or so,” Geithner said. “We are beginning the process of healing.”

Geithner defended the Obama administration’s efforts to help homeowners avoid foreclosure through subsidized mortgage modifications. When asked why few homeowners have so far received permanent reworked loans, the Treasury chief responded that the administration is “absolutely committed” to following through on its promises.

There is no doubt that US has come out of the sheer panic stage of 2008 and infact has even shown the ability to lead the world. But am extremely skeptical of US ability to keep a strong dollar while coming out of the recession. Geithner refers to the past as reminder to US ability to bounce back. Well in the past you did not have China and India plugging away at world resources.

Fresbee
Investing Contrarian