WASHINGTON — Treasury Secretary Timothy Geithner defended his approach to fixing the country’s economic mess Sunday, saying “the market will not solve this” while disclosing that a bailout fund for battered banks has $135 billion left and might need more.
Geithner used his first Sunday talk-show appearances to promote President Barack Obama’s massive government spending plan to ease credit, help borrowers and inject billions of dollars into the financial sector. Long kept behind the scenes, the Treasury secretary has emerged as the administration’s champion of a plan that fueled an uptick in Wall Street markets.
“We came through a period where people borrowed too much, and we let our financial system take on much too much risk,” Geithner said. “And the consequences of those choices, made over years, were a huge boom. And that boom, the air is now coming out of that, and that’s causing enormous damage.”
Obama and his administration last week announced a program to help banks free themselves of so-called “toxic assets.” These investments have tied up capital and kept them from resuming more normal lending to consumers and businesses.
The plan calls for the administration to partner with private investors, the Federal Reserve and the Federal Deposit Insurance Corp. to buy as much as $1 trillion in toxic assets from banks.
Like the president, Geithner cautioned against immediate expectations.
“It’s very important for people to understand that, you know, it took us a long time to get into this mess. It’s going to take us awhile to get out of this,” he said. “Progress is not going to be even. It’s not going to be steady.”
Geithner said Washington alone was equipped to salvage an economy that has seen jobs lost and credit shrink. Geithner confidently brushed off Republican criticism that too much spending would send the economy into out-of-control inflation.
“The market will not solve this. And the great risk for us is we do too little, not that we do too much,” he said.
Geithner appeared on ABC’s “This Week” and NBC’s “Meet the Press.”
