Treasury Secretary Tim Geithner discussed a number of challenges facing the U.S. economy in a discussion at the Brookings Institution. He said that the recovery is gradually moving along, but added that America faces a big governing test before the new year with respect to the debt limit, Bush tax cuts and the sequester. Mr. Geithner’s remarks comes ahead of this week’s IMF, World Bank and G20 finance ministers spring meetings.
According to the IMF Economic Outlook report, the global economy is slowly improving, expanding by 3.5% this year, with the U.S. economy expected to grow at about 2%. While the European Union will likely see its economy shrink due to the ongoing debt crisis, the decline is now estimated at 0.3%, less than previously predicted.
In its companion Fiscal Monitor report, the IMF cautioned that drastic deficit reduction measures could set the global recovery back.
Sec. Geithner made similar remarks in a series of recent public appearances. He defended the Obama administration's fiscal policy which, he claims has strengthened the U.S. economy. Speaking at the Economic Club in Chicago, the Treasury Secretary pointed to growth in business investment for equipment and software while acknowledging that unemployment remains too high.
Echoing the IMF, Sec. Geithner also cautioned lawmakers against rushing into extreme deficit reductions that could trigger another, deeper recession.