U.S. Treasury Secretary Timothy Geithner said Wednesday that the U.S. bears the brunt of responsibility for causing the financial crisis, and that the country's economy needs to recover in order for the rest of the global economy to bounce back.

Speaking to the Economic Club of Washington, D.C., Geithner said the International Monetary Fund is forecasting that world growth will contract 1.3% in 2009.

"Today's crisis is unlike any we have experienced for seven decades," he said, adding that countries around the world need to introduce "a scale of support that matches the scale of the challenge."

As for the U.S. response, Geithner said the fiscal stimulus plan introduced by President Barack Obama will save 3.5 million jobs and add three percentage points to GDP. The U.S. will go back to living within its means, he said.

Furthermore, he said the government's public/private partnership plan to take toxic assets off banks' balance sheets was the only reasonable option. Neither the government nor corporations themselves could have been expected to take on all the risk involved in buying these assets, he said.

Touching on the Troubled Asset Relief Program (TARP), Geithner said he welcomes any repayment of TARP funds from banks, so long as those banks are in a position to do so. The comments come after several financial institutions gave back TARP money, following political wrangling over company usage of the government funding.

Geithner said he is trying to ensure that American taxpayers are reimbursed the billions lent to AIG.

By Megan Ainscow and edited by Sarah Sussman
©CEP News Ltd. 2009