Jobless Rate Will Stay 'Unacceptably' High: Geithner
Focusing on cutting the US's big budget deficit now would jeopardize economic growth at a time when jobs are starting to be created, Treasury Secretary Timothy Geithner told NBC's "Today" show Thursday.
But even if that occurs, the unemployment rate will stay high for "a long period of time," Geithner said.
"We're just at the point now where the economy's likely to start creating jobs on net. That means incomes are going to grow, businesses are going to invest more going forward. And we'll come out of this," he said
The deficit is expected to rise to about $1.56 trillion dollars, or about 10.5 percent of gross domestic product, this year and some analysts expressed concern that it could lead to a downgrade of the US debt's AAA rating.
"Right now we need to make sure that we are doing everything we can to get this economy growing again, and creating jobs," Geithner said.
"If all you focus on right now is trying to cut the deficit too quickly right now, that will imperil growth, we'll have a weaker economy, and people will be living with higher unemployment for a longer period of time. We're not going to let that happen," he added.
The economy will start creating jobs as it is growing, but it will take a long time to bring down unemployment, Geithner said.
"The unemployment rate is still terribly high, and it's going to stay unacceptably high for a long period of time," he said.
"You know, this was the worst economic crisis since the Great Depression. A huge amount of damage done to businesses, families across the country. And we're going to be living with that damage for some time. It's just going to take us some time to heal that damage," Geithner added.
The $787 billion stimulus package is "doing exactly what it's supposed to do" in creating jobs, he said.
Geithner vowed again that the government will take steps to curb banks' excessively risky behavior, which led to the financial crisis.
"What happened in our country should never happen again," he said.
"People were paid for taking enormous risks. If those risks turned out well, they made a lot of money. If they turned out that they lost the money, they were not exposed to loss. It was a crazy way to run a financial system," Geithner said.