The Obama administration says the U.S. economy continues to recover from a deep recession and is less vulnerable to any future financial crisis.
Nearly a full year of economic expansion has yet to bring about significant reductions in America's stubbornly-high unemployment rate or the record-high federal deficit. Nevertheless, Treasury Secretary Timothy Geithner says the U.S. economy is on the right track after the worst recession of the post-World War II era.
"You are seeing a recovery," he said. "You are seeing private investment expand again and job growth starting to come back. That is very encouraging."
Geithner was speaking on NBC's Meet The Press program.
He acknowledged the economic recovery has been slow to gain momentum, but said the moderate pace is to be expected after a severe downturn made worse by a catastrophic financial crisis.
"This was a recession caused by a set of policies that left us with a $1.3-trillion deficit when the president came into office, and an economy that was falling off the cliff," he said. "Millions of Americans had already lost their jobs. The recession was a year old at that point. And given that Americans had been borrowing too much and we had a huge growth in risk-taking and leverage in the financial system, what you would expect is a more moderate-paced recovery than is typical."
Some economists worry about the possibility of a so-called "double-dip" recession, where the economy appears to be recovering, then stalls and plunges back into negative growth. Geithner said he sees no evidence that another downturn is imminent.
In the long term, the treasury secretary said the United States will be well-served by a financial reform bill President Barack Obama signed into law last week that attempts to shield the nation from the costs and economic damage arising from the collapse of major private financial institutions.
Appearing on ABC's This Week program, Geithner said the law will also help ordinary Americans.
"It will help consumers make better [financial] choices, with better disclosure and much more clarity about the terms of a credit card contract or mortgages loans," he said. "It also gives authority we [the federal government] did not have to put strong constraints on risk taking, on all the nation's largest [financial] institutions. That authority did not exist before, and it was central to what caused the near-collapse of the financial system."
The treasury secretary said President Obama will continue to champion tax cuts for all but the wealthiest Americans, as well as small businesses to foster economic expansion and job growth. He said tax hikes on top earners will be necessary to help tackle the massive federal budget deficit, which exceeds $1 trillion this year.