President Barack Obama has said that Tim Geithner, whose job coincided with a credit crisis, faces more challenges than any Treasury secretary since Alexander Hamilton, the first to hold the post. Geithner chatted with NEWSWEEK editor Jon Meacham in Washington about the deficit and the financial crisis. Excerpts:

Has the economy bottomed out?
Things have clearly stabilized. You're seeing some improvements in credit markets. It took a long time for these problems to build up; it's going to take time for us to work through them. It's going to be bumpy. Even as growth starts to turn positive, which will happen, unemployment is going to keep increasing for a while.

You have two children. The deficit over the next 10 years is expected to hit $11 trillion. How do you feel about saddling them with that debt?
Our immediate imperative is to get growth back on track. It requires us to do things that are expensive and in the short term will raise deficits. If we were to not do those things, then future deficits would be higher and growth would be lower.

Become a Fan of Jon Meacham
DISCUSS ON FACEBOOK

Follow Newsweek on Twitter

Hashtag: #newsweek

How big a political problem do you think the deficit will be going forward?
If you listen carefully, the whole feel of politics—the fiscal policy is different today. There's much more realism than we've seen in a long time. There's a broader appreciation that unless you bring the growth of health-care costs down, we're not going to be able to address these long-term fiscal deficits.

On the question of compensation, what's your salary, sir?
My salary is generous, appropriate for a public servant. It's under $200,000.

Would there be a reasonable proposal that executives receiving tarp money should be capped at what the secretary of the treasury makes?
No, I don't think our government should set caps on compensation. We need to make sure we put in place some broad constraints on the incentives that compensation systems create. You had a crisis magnified by the fact that people were paid to take a huge amount of short-term risk at the expense of their firm and the system as a whole.