President-elect Barack Obama today warned about the need for proper action in addressing the nation's economic troubles. Obama says that swift, bold, government action is the nation's best short-term hope to reverse the economic downturn. The World's Matthew Bell reports.
This text below is a phonetic transcript of a radio story broadcast by PRI's THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI's THE WORLD is the program audio.
LISA MULLINS: I'm Lisa Mullins and this is The World. It's not too late to do something about the troubled U.S. economy, but Washington has to take dramatic action as soon as possible to avoid long-lasting consequences. That was President-elect Barack Obama's message today. He spoke to an audience at George Mason University in Virginia and he made a plea to Congress to act boldly now to green light a huge stimulus spending plan. The World's Matthew Bell begins our coverage.
MATTHEW BELL: Leading up to Inauguration Day Mr. Obama has been all but silent on major U.S. foreign policy issues, saying there's only one president at a time and that it would be imprudent for the President-elect to risk sending mixed signals on international affairs, no matter how pressing they are. But the state of the economy is different. Mr. Obama isn't just sending signals, he's sounding the alarm. "The U.S. economy is in dire straits, bold action is needed," he said today, "and needed quickly or else a bad situation could become dramatically worse."
BARACK OBAMA: 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 our standing in the world.
BELL: "There's plenty of blame to go around," Mr. Obama said. Wall Street wrongdoers and Washington politicians all played a part, but the President-elect said now is not the time for finger-pointing. He asked Congress to work overtime with him and his economic team to pass a massive stimulus plan as quickly as possible.
OBAMA: A world that depends on the strength of our economy is now watching and waiting for America to lead once more and that is what we will do. It will not come easy or happen overnight and it is altogether likely that things may get worse before they get better, but that is all the more reason for Congress to act without delay. I know the scale of this plan is unprecedented, but so is the severity of our situation.
BELL: One point Mr. Obama made today will go over particularly well outside of the United States says Harvard economist Ken Rogoff, and that was when the President-elect said the economic crisis is largely a product of America's own making.
KEN ROGOFF: We made this problem, we did this, and we have to fix it, which American presidents are often very reluctant to say. We're always looking to blame China or someone else, and I think that will help with confidence, he really confronted that issue squarely.
BELL: What Mr. Obama did not do is give new details on how he would spend a fiscal stimulus that could reach $750 billion. He repeated his campaign pledge to give middle-class families tax cuts of a thousand dollars each, he mentioned the need for short-term infrastructure projects including buildings and broadband. And he spoke about the longer term need to improve education and create green jobs for the future. Ken Rogoff gives Mr. Obama high marks for hitting the right notes on what's needed in terms of a spending package, but he says that's the easy part.
ROGOFF: Really the big problem the United States faces, what separates this recession from a normal recession, what threatens us with much worse is the financial system and he'll obliquely referred to it, but what is he going to do about it? That's expensive, that's politically difficult, and I think that's the big questions that's gonna get answered in the first couple weeks of his administration. What is their approach going to be to rebooting our financial system?
BELL: Rogoff says those decisions such as what to do about troubled American banks will have to wait until after Inauguration Day. What makes those decisions so difficult he adds is that they could create economic winners and losers. And as with issues of U.S. foreign policy, Barack Obama is being careful not to send any signals on those potentially painful choices, at least while he remains President-elect. For The World, I'm Matthew Bell.
transcript