Tim Geithner was the first representative of the U.S. in 11 years to attend the World Economic Forum in Davos and it was most likely to reassure the financial world about the sustainability of U.S. debt and plans to reduce that deficit over the coming years. Mr. Geithner called for gradual reduction in U.S. debt as to not stall the tenuous economic recovery:
At Davos, therefore, delegates have been speculating over whether the US will be able to enact a sensible fiscal policy before there is a global rejection of the US dollar.
The seriousness of the situation is underlined by the fact that Geithner is the first Treasury Secretary to appear at the World Economic Forum in 11 years.
“There is a much greater recognition across the US political system that our fiscal position is unsustainable in the long-run,” he told the WEF, but added that measured, gradual decreases in spending were the way to go, otherwise they would put the economic recovery at risk.
