The U.S. government has a critical role in speeding the economic recovery, Treasury Secretary Timothy Geithner said Wednesday in Chicago.
In remarks before the Economic Club of Chicago, Geithner expressed optimism about the outlook for the economy, but stressed that the nation faces "very tough challenges."
He warned lawmakers against making drastic spending cuts at a time when U.S. households undertake the painful but necessary process of de-leveraging.
"A growth strategy for the American economy requires more than promises to cut taxes and spending," Geithner said in prepared remarks. "We have to be willing to do things, not just cut things."
Government can help spur the economy to a sustained recovery by investing in necessary programs, according to Geithner.
"This means taking action to support growth in the short-term—such as helping Americans refinance their mortgages and investing in infrastructure projects—so that we don't jeopardize the gains our economy has made over the last three years," he said.
Geithner took a number of veiled swipes at critics of the Obama administration's economic policies, insisting that the economy has not been hurt by over-regulation, as many Republicans suggest.
"The business environment in the United States is in numerous ways better than that of many of our major competitors, as measured by international comparisons of regulatory burden, the tax burden on workers, the quality of legal protections of property rights, the ease of starting a business, the availability of capital, and the broader flexibility of the economy," Geithner explained.
"There is no economic or financial case for using the fear of future deficits to cut as deeply into core functions of the government, to weaken the safety net or fundamentally alter Medicare benefits as do the Republican proposals," Geithner said in reference to the budget proposal recently pushed by the GOP.
by RTT Staff Writer
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