Posted on 09/10/2009 11:11:47 PM PDT by Jet Jaguar
Treasury Secretary Timothy Geithner offered a spirited defense of the government's efforts to forestall another Great Depression but cautioned that the recovery would be slow and painful.
"We understood how bad this was—how damaging this was—and we did things that people were incredibly critical of because we knew that this was getting away from us," Geithner told a special CNBC town hall meeting Thursday.
In the wide-ranging session, which took place nearly a year to the day after the failure of Lehman Brothers and the implosion of the nation's financial system, Geithner said the country needs not only to fix what is broken but also take preventive measures against a similar collapse happening again.
"We have to have much stronger rules of the game in place with much stronger constraints on how much risk can take place," he said. "People are so angry. They have had this searing experience that caused so much damage and I think generally people understand that we're going to have to change things. We can't let things go back to the way they were."
Asked whether the Federal Reserve and Treasury acted too slowly when the financial system began collapsing and if it intervened too much once it got involved, Geithner rejected both assertions.
"It feels unfair and unjust, but look at what happens if you take too much risk," he said. "If you indulge the sentiment that you can stall the crisis by teaching people a lesson, you're going to make the crisis dramatically worse and you're going to make it much more expensive to solve."
By the same token, he said the government is anxious to shed itself of stakes in various financial companies—Citigroup [C 4.75 0.09 (+1.93%) ] and American International Group [AIG 37.85 -1.04 (-2.67%) ] among others—but won't do so before the timing is right.
"We're going to be careful not to withdraw too soon," Geithner said. "The classic mistake that countries make in crises is they put the brakes on too early, they reignite the recession ultimately at much greater fiscal costs and much greater damage to the economy. That's the balance we've got to get right."
The bailouts for what he called systemically important companies have worked out well so far, at least in terms of return on investment. Of the $200 billion the government has pumped in from a variety of liquidity programs, it has seen a return of $80 billion so far.
"That money goes to reduce how much we have to borrow and it means that we have more resources available to do the necessary things our country needs," he said. "We're getting a pretty good return on those investments so far."
The town hall setting gave Geithner a chance to speak freely just a few hours after he faced a sometimes-hostile round of questioning from the Congressional Oversight Panel in charge of monitoring the $700 billion Troubled Asset Relief Program.
See Video: Final Words from the Geithner See Video: America's Borrowing Binge As for the economy, Geithner projected continued high levels of unemployment and tepid growth.
He chose to avoid making definitive statements about whether a tax increase was in the cards to help trim down the deficit. But he reiterated Obama's pledge during a speech to the nation Wednesday night that there would not be a tax hike to pay for health care reform.
"Right now, if you’re worried as most Americans should be about how we’re going to afford these things in the future, how we’re going to get back to a point we’re living in our means, the most important thing now, we can do, is to get this economy back to where we’re growing; where firms are investing again; people are creating jobs again," he said.
"And when we do that, the world needs to understand, Americans need to understand that we’re going to bring those deficits down. And that means we’re going to have to bring our commitments and our resources closer into balance."
Also in keeping with Obama's speech, Geithner used the opportunity to take a few jabs at the Bush administration for overspending.
Click here for the latest economic news "We can't ever again do what we did over the last many years, which is to go out and commit to huge expensive tax cuts without paying for them, or to go finance two wars without paying for them, to go finance a huge expansion of Medicare without paying for it," he said.
Setting things right, he said, won't be easy.
"We're going to make progress," he said. "It's not going to be even and quick. I think things are going to feel just hard, unacceptably hard, for a long period of time. But because want to fix this right, it's going to take a while."
LIAR
Hey Timmy, next April, focus on paying your damn taxes this time Ok
Yeah, some of “we” certainly have to learn to change things....like admitting that spending money “we” don’t have will not get “we” out of debt, eh Turbo Tax man?
[on a regional TV show here in Montana, "Face the State"]
Max Baucus said that there was no provision for illegals getting health care under "the bill". His reasoning was that there was NO FUNDING FOR IT! (well, gee Max, couldn't THAT change?)
Haven't Obama and his minions been telling us for months that they had no idea how bad it was. I think they are still saying that.
This is something like Bernie Madoff angrily denouncing the crime of shoplifting.
Yeah!
People shouldn’t be allowed to get away with tax fraud like I did. :)
We can start with getting back to the rule of law after your boss is ridden out of town on a rail.
There will be enough rope for this scumbag too!!
Asked whether the Federal Reserve and Treasury acted too slowly when the financial system began collapsing and if it intervened too much once it got involved, Geithner rejected both assertions. "It feels unfair and unjust, but look at what happens if you take too much risk," he said. "If you indulge the sentiment that you can stall the crisis by teaching people a lesson, you're going to make the crisis dramatically worse and you're going to make it much more expensive to solve." By the same token, he said the government is anxious to shed itself of stakes in various financial companies -- Citigroup [C 4.75 0.09 (+1.93%) ] and American International Group [AIG 37.85 -1.04 (-2.67%) ] among others -- but won't do so before the timing is right.Thanks Jet Jaguar.
Gypse, Tramp & Thief Turbo Tax Timmy.
Yes we do need to change things, in 2010
“I think things are going to feel just hard, unacceptably hard, for a long period of time...”
What a pity 0bama didn’t campaign with that slogan.
Waters Revealed Obama's Marxist Agenda During Questioning of Shell Oil Executive
We are being led by a bunch of turncoats and greedy back-stabbing NWO socialists. Geithner is a member of a gang of Federal Reserve Thugs. He is funding the government right down the drain.
Yup—concentrate on paying your fair share for once, Mr Turbo Tax man. Can’t believe this tax cheat has the job.
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