Transcript: Treasury Secretary Timothy Geithner and Alan Greenspan

This Week


STEPHANOPOULOS: A lot of good news out there this week, but the bad news is, the consumers are still real scared. Even though their income went up, the spending went way down. What more can the administration do, if anything, to encourage the spending to go back up?

GEITHNER: George, you are right that there are signs the recession is easing. And if you think about where we were at the end of last year -- we had an economy in freefall, a financial system on the verge of collapse. And the actions that this administration has taken have been very effective in helping stabilize conditions, help repair the financial system, bring down the costs of credit...

STEPHANOPOULOS: We've (inaudible) a bottom?

GEITHNER: But I think we have a ways to go. I want to emphasize the basic realities. Unemployment is still very high in this country. We need to make Americans more confident about their future...

STEPHANOPOULOS: How do you do that, though?

GEITHNER: And I think -- I think you need to do it through just by making sure people understand we are going to do what's necessary to bring growth back on track. We're going to stick with this until Americans are more confident in their future, businesses have access to credit, families are going to be able to put their kids through college. That's going to be the ultimate test of our (inaudible). And the policies the administration put in place working with the Congress were designed to provide very substantial support to make sure we get through this.

STEPHANOPOULOS: You mentioned the big problem of unemployment, and we're still nowhere near the kind of growth that it would take to create jobs. More than 2.5 percent growth to start to create jobs.

I know the administration has thought that's not going to come until next year, but some private economists now say it could happen in the second or third quarter of this year. They look at these numbers and see that. Do you have any reason to believe they're right?

GEITHNER: Well, I think you're right to say that the broad consensus of private forecasters is you're going to see positive growth in the second half of this year, and expect that to continue.

STEPHANOPOULOS: A growth at the 2.5 percent level?

GEITHNER: Not clear yet, but you need growth before you get people -- businesses to start creating jobs again, and that's what we're going to be very focused on doing.

STEPHANOPOULOS: So should Americans expect that more jobs are going to start getting created this year, or not?

GEITHNER: I think you're going to see -- what you're going to see first is growth turn positive. And then you're going to see the pace of job losses slow materially for the -- they have already slowed significantly, as you said. They're going to slow materially further.

But again, most private forecasters -- and let's use their judgment -- suggest you're going to see unemployment start to come down maybe beginning in the second half of next year.

STEPHANOPOULOS: And what about the flip side? What are the chances that we're actually going to see a second dip later this year?

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