DAVOS, Switzerland — U.S. Treasury Secretary Timothy Geithner said Friday that his country has more confidence now that there is a sustainable expansion – but added that it is not a boom.
"There's much more confidence now that we've got a sustainable expansion," he said at the World Economic Forum, but added, "It's not a boom."
Citing six quarters of growth in the world's biggest economy, Geithner said the back of the financial crisis had been broken and that a recovery was under way, even though the jobless rate has been stubbornly high in the range of 10 percent.
"Unemployment only starts to fall when you see economies grow again. We're only a year-and-a-half into positive growth. As the economy continues this process of recovery, you'll see more people put back to work."
Looking back, he said that the U.S. "made some very substantial mistakes" in how it handled the its financial system pre-crisis and that the fallout would linger for a long time.
"We ran an indefensibly antiquated ... terrible financial oversight system," he said
"There's more confidence that we're going to avoid slipping back into recession. I think that confidence is justified," he said, citing economists who have forecast growth of between 3 and 4 percent this year and next for the United States.
He encouraged China and other emerging economies to "soften their link to the dollar."
Regarding Europe's efforts to reign in debts, he said: "I'm very confident that they will be able to do that."
"They have no alternative but to deliver on their commitment, he said. "They recognize that there is no alternative to the reforms they are taking."
The European debt crisis "had a significant impact (on the United States) in slowing the momentum of recovery at a delicate point."