Geithner: Economy Still Climbing Out of a Ditch

U.S. Secretary of Treasury Timothy Geithner agrees the economy is "definitely slower." In an interview that headlined CNBC-organized Delivering Alpha in New York on Wednesday, Mr. Geithner told Larry Kudlow that the reason for the slowdown is the enormous size of the ditch the economy has been trying to dig itself out of since the recession began in late 2008.

Geithner did not mince words on where the responsibility lies for the current situation of uncertainty around the slowdown. While it did not confirm that the political situation currently was chaotic, he agreed that the conversation was "stuck," and that "it needs to be unstuck," as soon as possible. He noted that Congress has the control to remove uncertainty that the Treasury Department and the Federal Reserve do not.

"Remove the threat of fiscal cliff," Geithner noted, "pass the tax changes, the refinancing of mortages..., give states the ability to get teachers back to work... and you will have less uncertainty."

Prodded on the recent tax proposals by the Obama administration, Geithner noted, "There is no politician who would propose raising taxes unless they had to." He believes the steps taken by the administration on hiking taxes for wealthier individuals are part of a series of decisions the government has had to take to remove imbalances.

Mr. Geithner concluded the line of questioning by stating that the current fiscal cliff is nothing compared to the challenges the country faced in 2008 and 2009. He said the fiscal changes are nothing the government cannot do and has not been able to do before. According to Geithner, the challenge is to have Washington confront the issues head on so that fiscal policy changes are dealt with and not passed on. That, he believes, "would have grave consequences."