BATTLING BARNEY:

GREAT ERROR:

UNWILLING LEADERS:

NEW YORK: FOX Business reporter Peter Barnes began his televised interview with Treasury Secretary Tim Geithner two days ago with this question: "Is there a risk that the United States could lose its AAA credit rating? Yes or no?"Geithner's response: "No risk of that.""No risk?" Barnes asked."No risk," Geithner said.It's enough to make you wonder: How could Geithner know this to be true? The short answer is he couldn't .All you have to do is read the research report Standard & Poor's published on April 18 about its sovereign-credit rating for the US, and you will see it estimated the risk of a downgrade quite succinctly. "We believe there is at least a one-in-three likelihood that we could lower our longterm rating on the US within two years," said S&P , which reduced its outlook on the government's debt to "negative" from "stable ." There you have it: Geithner says the chance of a downgrade is zero. S&P says the odds it will cut its rating might be greater than one out of three. So who are you going to believe? Geithner? Or the people at S&P who actually will be deciding what S&P will do about S&P's own rating of US sovereign debt?It would be one thing to express the view that a downgrade would be unwarranted, or that the chance of it happening is remote. Either of these positions would be defensible. Geithner went beyond that and staked out an absolutist stance that reeks of raw arrogance: There is no risk a rating cut will occur. He left no room for a trace of a possibility, ever.The mystery is why Geithner would say such a thing. What's he going to do if S&P or some other rating company winds up disagreeing with him? Send Barney Frank to beat them up? The problem for leaders who make indefensible claims like this one is that, after a while, nobody knows whether to believe anything they say. Just remember all those government officials in Greece, Ireland and Portugal who kept saying their countries didn't need bailouts, long after it became clear they did.Perhaps Geithner would be well-positioned to make such assessments if he were the only person on the planet with the authority to grade sovereign debt -- and if there were zero risk that he would ever die. Not only is Geithner mortal, he doesn't even work for a nationally recognised statistical rating organisation.In one of the great errors of financial history, the US long ago bestowed that vaunted designation on the likes of S&P and Moody's Investors Service . The raters showed they could be corrupted when they put their AAA marks on countless subprime mortgage bonds that quickly turned sour. Unlike the companies that bought those labels, though, the US government didn't solicit S&P's ranking of its debt. Trying to predict with certainty what the raters may do next is a fool's game.Sure, it's conceivable the government might threaten to strip the raters of their officially recognised franchise as retaliation if they dared to downgrade the US We can only hope this isn't what Geithner had in mind when he made his bold prediction. A move like that would risk a major scandal, and it might not even work.Nothing the raters say should matter, of course. The markets are well aware the US debt is on its way to surpassing the country's annual gross domestic product, and that few leaders in Washington are willing to get federal spending under control again.The least Geithner could have done was take a page from Lloyd Blankfein, the chairman and chief executive officer of Goldman Sachs Group Inc. (GS), and throw in a wiggle word or two. Testifying last year at a hearing led by Democratic Senator Carl Levin of Michigan, Blankfein said "we didn't have a massive short against the housing market," notwithstanding that Goldman made about $500 million shorting the housing market in 2007.Blankfein, of course, included the word "massive" in his statement, whatever that's supposed to mean. Geithner could have done something similar. Yet for some inexplicable reason he didn't , which, if nothing else, should tell us he probably wouldn't have much of a future as a top executive at Goldman Sachs.