Tags: Lew | Treasury | economic | recovery

Treasury Secretary Lew: US Economy Leading Global Recovery

By    |   Wednesday, 13 November 2013 12:22 PM

The U.S. economy has bounced back from the ill effects of the government shutdown and debt ceiling crisis and is leading the world's economic recovery, Treasury Secretary Jack Lew told CNBC.

"The United States is recovering from the worst recession since the Great Depression and we're leading the developed world in the quality of our recovery," Lew said.

The government shut down for 16 days last month.

Editor’s Note: New Video: Obama Plans to Redistribute Seniors’ Wealth

The turmoil was strictly political, not an economic crisis, Lew stressed. Although some worried that the U.S. might default, Congress did eventually raise the debt ceiling.

"What we learned a few weeks ago is that it did get to the 11th hour, but at the 11th hour, there was a broad bipartisan consensus to be where the U.S. has always been," Lew told CNBC. "We stand by our obligations and the full faith and credit of the U.S. cannot be called into question."

Despite the U.S. economic rebound, the world cannot rely on the U.S. alone to continue the global recovery, said Lew, who was visiting Asia.

"The message that we are bringing in my conversation is you have to look at how sustainable growth is going to be achieved and it is a similar message here [in Asia] and in Europe. Demand growth is critical. U.S. growth cannot make up for a lack of demand growth."

When Lew urged Japanese leaders to implement long-term structural reforms to revitalize their economy, they indicated they hope to move forward with proposals for labor market reforms, he told CNBC.

Lew also hopes to meet with Chinese leaders to learn more about China's economic plans. After a four-day, high-level, policy-setting meeting called a plenum, Chinese leaders said they will give the country's private sector a larger role in the economy.

"The communique coming out of the plenum is at a very general level," Lew told CNBC. "It doesn't spell out all the policies. So in the coming discussions, I hope to learn more about some of the specific polices."

Some investors are not so sure the U.S. will avoid another political crisis. Congress funded the government only through Jan. 15 and raised the debt limit through February.

The cost of credit default swaps used as protection against a U.S. default remains elevated, reports MarketWatch. Although they've fallen since Congress reached a budget deal, CDS for a one-year contract still cost more than the five-year.

"Even though the shutdown has been resolved to a certain extent, the whole idea that the debt ceiling has just been pushed back until next year could have an impact," Gavan Nolan, director of credit research at Markit, told MarketWatch.

Editor’s Note: New Video: Obama Plans to Redistribute Seniors’ Wealth

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The U.S. economy has bounced back from the ill effects of the government shutdown and debt ceiling crisis and is leading the world's economic recovery, Treasury Secretary Jack Lew told CNBC.
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2013-22-13
Wednesday, 13 November 2013 12:22 PM
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