US Treasury Secretary Timothy Geithner said Monday that it was unlikely the United States would sink back into recession, adding the government has the tools to counter slow growth. "I know there's this perception around there that there's no room for policy, but it's a deeply mistaken perception," he told CNBC television.
"In countries around the world, not just in the United States, we have plenty of room to do things to help make this economy strong in the short term, and it's our responsibility to do that," he said. Asked if the United States was at risk of a new recession in the wake of Standard & Poor's first-ever credit downgrade of the US government, Geithner said "I don't think it's likely."
He said much depends "on the quality of judgement of governments and central banks around the world." "If you look at the world, growth has slowed, but there is a lot of room for central banks and governments to act in order to help deal with the pressures we're still seeing around the world."
In recent weeks numerous economists have warned that US growth has slowed so much that it risked entering another period of negative growth, only two years after the last "Great Recession" ended. Analysts worry the Treasury, the Federal Reserve and other authorities have too few tools available to stimulate growth, especially given pressure in Congress and now from the ratings agencies to slash spending in order to reduce the country's huge debt.