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Tim Geithner: There's been a 'scary erosion of the pragmatic center'

Of all the challenges facing economic growth, former Treasury Secretary Timothy Geithner believes the U.S. political situation is the worst.

"I think the scarier things are really about politics, the scary erosion of the pragmatic center in politics, the diminished capacity to make sensible economic choices, something governments really have to do," Geithner said at the CNBC/Institutional Investor 2016 Delivering Alpha conference in New York.

He spoke along with Ray Dalio, founder of Bridgewater, the world's largest hedge fund.

Geithner served as New York Fed president during the 2008 financial crisis and then led the Treasury Department under President Barack Obama.

Looking at the current landscape, he said it's become difficult to implement stimulative policies considering political rancor. At the same time, he said the general growth trend is muted.

"It's hard to overcome those deep secular forces and the consequences of coming out of a long-term debt cycle and secular pressures on demographics," he said.