The measures the government has undertaken to rescue the U.S. financial system will cost “dramatically less” than anticipated, Treasury Secretary Tim Geithner said.
The billions spent to rescue the submerged credit markets and financial institutions in the past year have already cycled back to the Treasury, Geithner said, and the taxpayers have made a modest profit.
“Banks are repaying with interest. And we’re going to be able to solve this financial crisis at dramatically less cost than we initially anticipated,” Geithner said, during an interview on the Fox Business Network, pointing to Bank of America’s decision to repay its Troubled Asset Relief Program (TARP) loans. “And that’s going to allow us to devote substantial resources to meet the very difficult challenges we still face as a country.”
But the Treasury secretary said that the financial system remained still too fragile to end the TARP program, and that the U.S. would only be better able to handle its own debts once the economy had been rejuvenated.
“If we don’t get growth going again, it’s going to be much harder for us to address that,” he said. “Deficits do matter and if we don’t bring those long-term deficits down once growth is established and unemployment has come down, then we’re going to face the risk of a weaker recovery and less confidence.”
By Michael O’Brien – thehill.com
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