US economy still in difficulty, says Geithner

Timothy Geithner Mr Geithner said the government's stimulus plan cost less than expected

US Treasury Secretary Timothy Geithner has warned that the country's economy "is still going through an incredibly difficult period".

He told a congressional hearing the downturn's impact would be "lasting".

Mr Geithner also revealed that the US government had recovered more than half the money it had spent on the Troubled Asset Relief Program (Tarp).

He added that Tarp investments had "generated $24bn (£16bn) in additional revenue for taxpayers".

Mr Geithner said "millions of Americans are still looking for work and are suffering from the damage of a deep recession. The impact of this crisis will be lasting".

But he told the Congressional Oversight Panel the US government's actions to boost the economy during the crisis had cost less than expected.

"Tarp has helped restore financial stability at a much lower cost than anticipated," he said.

The $700bn Tarp bail-out fund was approved by Congress at the end of 2008.

It has been widely credited with playing a vital role in turning round the fortunes of the US economy, which returned to growth during the second half of last year after a long and deep recession.

But it has also been criticised for not meeting certain targets, including increased bank lending.

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