US Treasury Secretary Timothy Geithner pledged to “do what is necessary” to jolt the United States out of recession but said the rest of the world should agree to act in a coordinated way.
On Public Broadcasting Corp's “Charlie Rose Show,” Geithner claimed that steady overseas demand for US Treasury debt was a vote of confidence that the Obama administration was on the right track in countering the “deep mess” the economy is in.
“This president is going to do what is necessary to get us through this. ... We're a terrifically strong country with abundant resources, and we will get through this,” said Geithner, referring to President Barack Obama's commitment to end the more than year-long US recession.
But ahead of this weekend's Group of 20 gathering of finance chiefs near London, and a later one in April for political leaders, Geithner said the United States will push for action by others to match the aggressive US approach.
“You're going to see (President Obama) lead an ambitious agenda to try to get the world moving with us so that the global economy is firing on all cylinders,” he said, adding that “getting the world to move with us (is) necessary and critical.”
The 27-nation European Union on Tuesday rebuffed an anticipated US call at the G20 for more spending to combat world recession, saying it didn't see the need for more fiscal stimulus now and wanted the focus kept on regulatory reform.
The Obama administration has won Congressional approval for a $787-billion emergency stimulus packet of tax cuts and spending and has outlined a multi-trillion dollar budget.
But the chief White House economic adviser, former Treasury Secretary Lawrence Summers, said this week that world leaders should agree to pump more taxpayer money into the economy in a coordinated bid to restore demand and spur a return to growth.
Geithner, just six weeks into the job, said the United States was reaping a benefit from its clearly stated commitment to do whatever it needed to do to get the world's largest economy back on a growth track since demand remains strong for US Treasury-issued debt.
“Our markets are still the most liquid markets in the world. And frankly, there is a lot of confidence still in our capacity to manage this and get through it,” he said.
“Everything we do in moving aggressively to fix this crisis is guided by that basic obligation, of not just to American investors but around the world, to do what is necessary to get this economy back on track.”
Geithner, who has faced some criticism for not spelling out details of a proposed public-private fund for buying bad assets from banks, promised action within coming weeks and said he was moving deliberately to minimize risks of losses for taxpayers.
“There are a lot of people who want us to come in and pay an inflated price for these assets, and have the government absorb a bunch of those losses directly to socialize that risk,” he said, adding that he wouldn't let that happen.
“We want to pursue a market mechanism that leaves the taxpayer with less risk and better overall benefit in trying to fix this system.” (Reuters)