CQ Transcript: Treasury Secretary Geithner on ABC’s ‘This Week’

From CQ Transcript:

STEPHANOPOULOS: And some experts believe that we’re really entering a brand new world. I was struck by a piece of research I saw from a branch of Citigroup. This was -- and I’m going to share it with our viewers. They’re saying, “Don’t be in a state of denial, we are really entering a brand new economic world even after the recovery, because for so long the U.S. has been acting like a leveraged hedge fund.”  And they go on to say: “Not only is the lifestyle and wealth creation likely to be unsustainable going forward, but if you believe, as we do, that we’ve been operating in a leveraged economy, then the new normal in terms of economic data, profitability of companies, et cetera, may be a shadow of the past.”  So do Americans have to get used to the idea that the boom times really aren’t coming back?

GEITHNER: Well, we’re going to emerge out of this stronger. And we’re going to do that because the president and the Congress are going to make sure that we have the government doing a better job of things it needs to do.  So we have a more productive economy in the future, better education outcomes, better health care system, better energy policies, stronger infrastructure.

STEPHANOPOULOS: Stronger, but as affluent as we were in the past?

GEITHNER: Well, you know, we want to have sustainable growth. We don’t have -- we don’t want to have a recovery which is going to be artificial and short-lived, just produce the seeds of the next crisis.  We want to have a durable recovery based on a stronger foundation that has a stronger, more productive economy emerging through it where the gains are more broadly shared across the economy as a whole.

STEPHANOPOULOS: So income inequality goes down?

GEITHNER: It should go down. Again, you know, if you look at the record of performance in the ‘90s, you know, we had very strong productivity growth during a period of fiscal discipline, fiscal responsibility, strong private investment, and the gains were shared much more broadly.  We can do that as a country, but it requires getting this government to do a better job of doing things only governments can do. That’s why I assume important we get better outcomes. That’s why fixing our health care system and get costs growing more slowly is so important. That’s why we need a better energy policy. And that’s why infrastructure needs to be improved.