U.S. should be careful of certain budget cuts: Geithner

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VietnamNet English - 30 month(s) ago 1 readings

U.S. Secretary of the Treasury Timothy Geithner said Wednesday that despite a recovering economy, the U.S. should be wary of cutting budget too much, in particular in areas such as education and social security.

U.S. Secretary of the Treasury Timothy Geithner said Wednesday that despite a recovering economy, the U.S. should be wary of cutting budget too much, in particular in areas such as education and social security.

Speaking at the Economic Club of Chicago, Geithner said the U.S. economy was on the right track and had made important gains in manufacturing and other sectors.

At the same time, the U.S. economy is still weak in terms of high unemployment and household debt levels, he said.

For this reason, Geithner said that certain heavy cuts to the U. S. budget were not the best course of action at such a fragile time for the U.S. economy, and that the United States must be selective about its deficit-reducing strategies.

According to Geithner, historical examples showed that cuts made too soon after a financial crisis could bring about new recessions and economic difficulties.

In Geithner's opinion, the United States should therefore express caution and consider the long-term effects of deficit- cutting measures that target the safety net, and especially how they could play out in a global economy.

"Cutting government investments in education and infrastructure and basic science is not a growth strategy," Geithner said at the Chicago event. "Cutting deeply into the safety net for low-income Americans is not financially necessary and cannot plausibly help strengthen economic growth."

"This strategy is a recipe to make us a declining power -- a less exceptional nation," Geithner added. "It is a dark and pessimistic vision of America."

Geithner was appointed Secretary of the Treasury by President Barack Obama in January 2009. Prior to his appointment, Geithner served as president of the Federal Reserve Bank of New York.

VietNamNet/Xinhuanet

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