Geithner Says U.S. Can’t Afford to Apply Growth Brake Too Soon
U.S. Treasury Secretary Timothy Geithner said that authorities will be careful not to blunt measures aimed at pulled the economy out of recession.
Withdrawing stimulus too soon “would weaken our long-term fiscal process and weaken the basic fabric of the economy,” Geithner said in an interview with Bloomberg Television in Paris today. “That’s not something we can afford to do.”
The U.S. unemployment rate rose in June to the highest in almost 26 years as officials battle the deepest recession in half a century. Geithner said July 11 it’s too soon to determine whether a second stimulus package is needed, saying that the $787 billion measure that President Barack Obama signed into law in February may not take full effect until the second half.
“We’re not going to repeat the classic mistake that the U health insurance.S. made in the 1930s and that governments around the world have made in financial crises, by at the first sign of hope putting the brakes on prematurely,” he said.
China became the first major economy to rebound from global recession after today reporting 7.9 percent growth in the second quarter. Geithner said that emerging Asian economies are providing ground for “cautious optimism” about the prospects for global growth.
“We’re seeing durable signs of greater confidence” in markets, Geithner said. He earlier called for “comprehensive” reform of compensation practices as part of the U.S.’s shakeup of how financial markets are regulated.