By Bridget Johnson - 07/25/10 03:10 PM EDT
Treasury Secretary Timothy Geithner said the economy was experiencing “very encouraging” recovery, but cautioned that a transition from government intervention to private investment needed to be made to keep the recovery going.
Geithner, appearing Sunday morning on both ABC’s “This Week” and NBC’s “Meet the Press,” struck a mostly optimistic tone even when asked about Fed Chairman Ben Bernanke’s remarks last week that the economic outlook was “unusually uncertain.”
“Americans are still living with some caution,” he said, adding that healing was occurring and taking one of numerous digs at the previous administration: “This was a recession caused by a set of policies that left us with a $1.3 trillion deficit when this president came into office.”
“We’ve seen six months of positive job growth by the private sector,” Geithner said on ABC. “That’s pretty good.
“...We want to see it happen at a faster pace,” he said. “But I think most people understand that, you know, this was a deep crisis. The scars ran very deep, devastating damage. It’s going to take time to repair that damage, take time to grow out of this, but we’re making progress.”
The Treasury secretary said that he believed the economy would gradually strengthen over the next year or two, “but we’ve got a long way to go still.” Businesses “faced with the prospect of the economy falling off a cliff are still cautious” about hiring and investment, he said on “Meet the Press.”
Geithner, while stressing that he does not believe the country is headed for a double-dip recession, said that the new financial reform law would help avert a crisis in the future with better “shock absorbers.”
On NBC, Geithner said financial sector reforms were necessary to “make sure this system goes back to its core purpose. ... Our system at its best was the model for the world in doing that.”
“It also gives authority we did not have to put in place strong constraints on risk-taking on all the nation’s largest institutions,” he said on ABC. “That authority did not exist before, and it was central to what caused the near collapse of the financial system.”
“I don’t think there’s any reform bill, no law in any country that can prevent all financial crises,” Geithner said, but added that he thought such reforms in place before the recession “would have caused much less damage.”
Geithner vowed that the administration would press forward with policies to cut the “large and inherited deficits” — projected Friday by the Office of Management and Budget to hit $1.47 trillion with high unemployment.
Next up is reforming Freddie Mac and Fannie Mae while preserving some “carefully designed” guarantee for people to finance home even in times of recession, Geithner said, predicting that a set of reforms would receive broad bipartisan support.