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PEBO to Make Dire Forecast of World Without Stimulus; Also Will Push More Regulation

January 08, 2009 6:06 AM

"I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible," the President-elect will say this morning in a speech on the economy.

He will make a dire prediction: "If nothing is done, this recession could linger for years.  The unemployment rate could reach double digits.  Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four.  We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future.  And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world. In short, a bad situation could become dramatically worse."

Mr. Obama will also acknowledge that "There is no doubt that the cost of this plan will be considerable.  It will certainly add to the budget deficit in the short-term.  But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy.  It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe.  Only government can break the vicious cycles that are crippling our economy – where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit.

"That is why we need to act boldly and act now to reverse these cycles.  That’s why we need to put money in the pockets of the American people, create new jobs, and invest in our future.  That’s why we need to re-start the flow of credit and restore the rules of the road that will ensure a crisis like this never happens again.

"That work begins with this plan – a plan I am confident will save or create at least three million jobs over the next few years.  It is not just another public works program.  It’s a plan that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done.   That’s why we’ll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century.  That’s why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public sector jobs of teachers, cops, firefighters and others who provide vital services."

Mr. Obama will try to argue that this stimulus plan will be different than previous spending proposals.

"I understand that some might be skeptical of this plan," he will say. "Our government has already spent a good deal of money, but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy.  That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems – we’ll invest in what works.  The true test of the policies we’ll pursue won’t be whether they’re Democratic or Republican ideas, but whether they create jobs, grow our economy, and put the American Dream within reach of the American people.

"Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made transparently, and informed by independent experts wherever possible.  Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent.  And as I announced yesterday, we will launch an unprecedented effort to eliminate unwise and unnecessary spending that has never been more unaffordable for our nation and our children’s future than it is right now."

He will also talk about other steps needed to help the economy.

"Now, this recovery plan alone will not solve all the problems that led us into this crisis," he will say. "We must also work with the same sense of urgency to stabilize and repair the financial system we all depend on.  That means using our full arsenal of tools to get credit flowing again to families and business, while restoring confidence in our markets.  It means launching a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes.  It means preventing the catastrophic failure of financial institutions whose collapse could endanger the entire economy, but only with maximum protections for taxpayers and a clear understanding that government support for any company is an extraordinary action that must come with significant restrictions on the firms that receive support.  And it means reforming a weak and outdated regulatory system so that we can better withstand financial shocks and better protect consumers, investors, and businesses from the reckless greed and risk-taking that must never endanger our prosperity again.

"No longer can we allow Wall Street wrongdoers to slip through regulatory cracks.  No longer can we allow special interests to put their thumbs on the economic scales.  No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust.

"It is time to set a new course for this economy, and that change must begin now.  We should have an open and honest discussion about this recovery plan in the days ahead, but I urge Congress to move as quickly as possible on behalf of the American people.  For every day we wait or point fingers or drag our feet, more Americans will lose their jobs.  More families will lose their savings.  More dreams will be deferred and denied.  And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse."

- jpt

January 8, 2009 | Permalink | Share | User Comments (37)

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"Only government" "Only government"

Groan

Posted by: B | Jan 8, 2009 9:49:49 AM

Hey Obamatrons - whatever you think Bush did to deficit spending, your leader just validated it, and then some.

Posted by: Caroline Kennedy | Jan 8, 2009 9:43:06 AM

""No longer can we allow Wall Street wrongdoers to slip through regulatory cracks. No longer can we allow special interests to put their thumbs on the economic scales. No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust."
------------------------------------
So, does this mean that Barney Frank will fight Obama's regulation attempts the same way he fought Bush's?

Posted by: Mike_C | Jan 8, 2009 9:24:48 AM

Bush is without a doubt a terrible President. But the fact that he stinks will never make Obama smell like a rose. Anyone can look good when compared to bad.

Posted by: MrkMckHan | Jan 8, 2009 8:58:43 AM


This is a negative comments about how they wrote. It is going to make us laugh after he sworn in. Just like another Clinton Admin. It is not Bush's fault.

Posted by: anonymous | Jan 8, 2009 8:58:19 AM

Jobs. Jobs. Jobs. The Middle Class. Regulate the heck out of Wall Street. Make them work for the US govt and the people. Get our return on investment back from the greedy scum. Jump on GM and Chrysler and make them drop their prices. Tell their mgmt they can make regular salaries like all the rest of us schmucks until they prove they can compete with green cars that Americans can afford.

Posted by: Bob | Jan 8, 2009 8:54:32 AM

On the contrary, normandyfour. Just look what Obama inherits, thanks to the Bush bunch:

War in Iraq
War in Afghanistan
Deficit in the trillions
Worst Economy since the Great Depression
Nearly double-digit unemployment
Iran
Israel/Hamas conflict
Failing automobile industry

Posted by: William J. LePetomane | Jan 8, 2009 8:53:29 AM

rose colored glasses must be selling like hot cakes. everything is just dandy here in America

Posted by: normandyfour | Jan 8, 2009 8:50:41 AM

"Jerk" does not begin to describe Bush, Cheney, Rice, Rumsfeld and even McCain, Faceit. I can, however, think of some adjectives that apply to that bunch:

Incompetent
Dangerous
Ruthless
Corrupt

Posted by: William J. LePetomane | Jan 8, 2009 8:50:19 AM

Three cheers for inexperienced community organizers. If this jerk can do something intelligent and productive, then there's hope for Caroline Kennedy who has not even been a community organizer.

Posted by: faceit | Jan 8, 2009 8:43:25 AM

Thanks for the cheery outlook, Madison

Posted by: William J. LePetomane | Jan 8, 2009 8:43:05 AM

madison,

You will be proven wrong in just 6 short months.

This is America buddy.

Posted by: Steve_NJ | Jan 8, 2009 8:42:30 AM

Thanks a bunch, George W. Bush. You added more to the deficit than ALL 42 PRESIDENTS BEFORE YOU COMBINED! Don't let the door hit you in the ass on the way out.

Posted by: William J. LePetomane | Jan 8, 2009 8:42:14 AM

He's making sure everyone knows BEFORE he is inaugurated that he won't be able to fix the economy. This is his way of saying, "Don't blame me - I can't fix the mess, even though I SAID I COULD WHEN I CAMPAIGNED."

Washington is useless and we are sinking deeper and deeper into recession.

I predict a time in the not too distant future when there will be mass protests and violence against our government here in the U.S. by Americans. This country will be torn with internal fighting just like the third-world countries. The government doesn't care, it's too polluted with corruption and scandal and crime to do anything productive for the American taxpayers.

Posted by: madison | Jan 8, 2009 8:39:32 AM

Thank God the Do-nothing Bush has less than 2 weeks to leave the mantle to a "real" President who cares and is willing to tackle America's problems head-on.

Yes President Obama, this is the change we voted for.

Posted by: Steve_NJ | Jan 8, 2009 8:38:16 AM


We CAN'T believe in this. The article doesn't make sense.

Posted by: anonymous | Jan 8, 2009 8:34:01 AM

Now that's a President we can believe in!

Posted by: Danny Gorgievski | Jan 8, 2009 7:58:54 AM

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