http://news.yahoo.com/s/nm/20090422/pl_ ... eithner_15Geithner stressed that, while the United States is prepared to incur big budget deficits now to spur economic activity, it is vital to set out a path for getting spending under control over the medium term.
"That is very important to do, because the American people and investors (around the world) need to understand that we will have the will and the commitment as a country to go back to point that we are living within our means," Geithner said.
"To get to that point we have to get a recovery in place," he added.
Once we are out of this recession (assuming that happens in the next three years or so), I guess we will then get to see how well Obama/Geithner/Democratic Congress responds to the need to restore a balanced budget (or maybe even flirt with the idea of having a surplus to retire some debt).
We've dug ourselves a deep debt hole leading up to this recession, and recessions/depressions always create even more debt out of necessity, so when we are back on our feet, we need to sacrifice in many ways in order to pay for the excesses (spending too high and/or taxes too low) we have enjoyed for way too long.
Cutting back on spending and/or raising taxes will result in sacrifices for many of us, and doing either will likely have an adverse impact on growth (although maybe it could prevent another boom/bust cycle). But one way or another, we need to get back in the black, and all options should be on the table.