Obama: A Continued Economic Decline Is Not Acceptable

Barack Obama, addressing the press for the fifth straight day, offered perhaps his gloomiest assessment yet on the current economic situation. Relaying how the talks with his economic teams have revealed a landscape far more challenging than previously imagined, he insisted that "a significant amount" of government spending was needed "on the front end."

"What is striking in the conversations that we have had with economists from the left and the right over the past several months is how the economic forecasts have deteriorated, and the conclusion has been with credit freezing up, with businesses laying off workers, with a continued weakness in the housing market, and escalating foreclosures, that unless you have a bold approach, you could see the economy continuing to decline at a pretty rapid clip. That is not acceptable to me," he told reporters. "I don't think it is acceptable to the American people."

More bad economic news is indeed anticipated. The housing market is expected to get hit with another round of massive foreclosures as rates on subprime and other loans get bumped up. Moreover, state budgets are precarious and governors could also end up pleading for bailouts from the federal government.

Reports from inside the transition and on Capitol Hill suggest that the stimulus package Obama will sign after taking office could grow to $1 trillion. It is a sum of money that humbles even the president-elect.

"First of all, I'm concerned about the numbers being talked about," he said. "We are not intending to spend money lightly. You know, the tax burden on Americans are already high. We are inheriting a deficit that is probably above $1 trillion. And so, look -- I'm a taxpayer like everybody else, and I don't want to see money wasted."

Obama went on to note that, in this environment, tough budgetary choices will have to be made. And that the idea of narrowing the deficit was unrealistic. That, however, wasn't an excuse for fiscal prudence. Or, for that matter, to not have one's eye on the long-term effect of near-term spending.

"I am confident that we are going to put people back to work," said Obama. "I'm confident that businesses are going to start growing again. It is going to take some time, but we can get this done. Once we have an economic recovery and the economy is growing again, then we are going to be confronted with this enormous deficit... and so, part in parcel of the overall economic plan is going to be a mechanism to get our mid-term and long-term budgets under control. I want to be very clear, we are going to make some difficult choices on the budget, and I'm going to make sure by the way that some of the difficult choices are under my watch and not just somebody else's watch."

Comments

[Shadow08]

Barack Obama is undertaking an enormous job. He will meet GOP obstruction at every step of the way. They want to see him fail. They know how badly they screwed things up and if democrats repair a republican catastrophe as bad as this one, they're finished.
If America pulls out of this nose-dive under democratic leadership, it will end the republican party.

[Beninn]

It's time for the American people to be bailed out. A clean slate, a do-over, all our debt wiped out.

All regulations pre-Reagan put back into place. credit companies no longer allowed to charge usury rates. No more privatization of US government services and resources. All tax breaks for corporations moving jobs overseas ended.

That's how you put Americans back to work and get the economy back on track, Americans spending again and working toward the American dream.

[Shadow08]

Debt will have to bve forgiven. Money will have to be spent and jobs created. I agree America can no longer survive under anything that was legislated, de-regulated or created by the republicans.
The Neo-cons failed. Reagan-omics failed and the bush attempt at a w a r economy while cutting taxes failed miserably. It is time, for a clean slate. You got that right. It's the only way to survive what the bush republicans have done to this country.

[cbates]

What is also scary is the quewstion of what happened to the $300 billion Henry has spent and who got the $ 2 trillion from the Federal Reserve a few months back?

Also, I have heard that there are trillions setting off shore in special accounts that can not come back into this country or will not come into the economy because they don''t want to pay taxes. The wierd thing is that the owners of this offshore money would like to buy up companies now that the stocks are selling at % 70 off. If you have money that is cash buy stocks in these huge reductions.

[cbates]

What also is scary is that huge sums of money owned by Americans are setting offshore and can not come back unless taxes are paid. If you have cash buy stocks while the values are 70% off.

[cbates]

There is something to be said about your approach. It could not be any worse than what we see now. That is trying to spur recovery through folks who created the disaster hasn't worked.

All loans should be made fixed and adjusted to a rate that is commensurate with income increases. How in the world someone thought and or banked on a mortrgage rate of 12 % being sustainable with the small increments seen in wage increases is beyond stupid to just looking at an equation and balancing it it with no eye to reality.

Also, how in the world can anyone provide a degree in something that is akind to our economy is beyond me. You may as well have a history degree because the economy is something seen in the rear veiw mirror.

[spartacus275]

It's time for the American people to be bailed out. A clean slate, a do-over, all our debt wiped out.

This is an interesting idea but wont work if Americans don't learn how to budget & spend money wisely. Absent of this Americans - will just end up in the same mess we're in now.

[Tim303]

Come on everybody it's not that scary. It's a three letter word and it goes T-A-X. Seriously. Time to turn this Titanic around, the less horrible way, by raising taxes on those who can afford it. What's a million or two less to someone who already has millions to spend?

And while we're at it, close the offshore tax havens. I hear the Brits run most of them...

[DFL]

EVERY TIME THE GOP LEAVES THE WHITE HOUSE THEY LEAVE BEHIND A RECESSION OR DEPRESSION.

[chronic]

Sho do!

[WyomingJack]

Obama tells it like it is. Unlike Bush who allows the country to be in a recession for 11 months before it is announced to the public. Truth hurts, but lies destroy.

[LuvDaH8ters]

lies are the lubrication that make the wheels of relationships work...

[ThePhilosopher]

A recession is a minimum of two quarters of negative growth in GDP - you can't know that you're in a recession until many months have passed.

[RitaLouise]

I am all for the stimulus that targets schools, highways, bridges, sewer, water, and all other infrastructure that has been so sadly neglected over these past years. But here is where it gets muddy, and we have seen how the so-called rebuilding of Iraq resulted in graft, corruption, overlooked oversight, etc. Don't you think for one moment that there aren't the vultures already circling to cash in on the plight and vulnerability of all concerned. Think Haliburton with another name, subsidiary, or off shore company and you can readily see the pitfalls here. Unless we have strict accountability with this money being spent, no contracts let without bidding, and I mean rigid rule bidding, etc. you get the picture. If there are predators out there who will take advantage of a military situation where many are being killed, maimed and destroyed, do you for one dreamy moment think they are not already scheming how to get their hot little hands on this money that should rebuild our financial standing and infrastructure? That is the inherent danger here, and unless we learned the lesson in Iraq, and yes, Vietnam, we are once again going down the rabbit hole.

[vjoseph]

Sorry, Sam but I think you are reporting really su.ck. so I am posting the press conference

http://www.msnbc.msn.com/id/21134540/vp/28316735#28316735

[MajorKong]

It's nice to at least hear a President treating us like grownups and not talking to the country like we're a bunch of 4th graders.

[vjoseph]

My pet goat?

[HumeSkeptic]

At least one can understand what this guy is saying. That is already a step in the right direction.
.

[Badger84]

After 28 years of American infantilism, brutal honesty is both needed and refreshing.

[vjoseph]

Hear, hear

[Keypinitreel]

I agree... here here... rather be told the hard truth than a rosey lie. Much Respect O.

[elsellel]

a second, hear, hear.

[Shadow08]

Agreed. Speaking the truth has to be the first step in problem solving. The Bush admin. refused to tell America the truth about anything, and look at the shape we're in.

[madisonhack]

I understood every lie that Bush uttered in his mumbo jumbo doublespeak way. He belongs in prison for treason.

[truthinreporting]

We are expeiencing the result of the Republican Party ideology and most recently the Bush/Cheney administration. Anyone who supports/supported Republican policies should be ashamed. Unfortulately, many are not. Thank God, Obama waselected. I'm sure he didn't sign up for the current debacle our country finds itself in, but thank God he is the one who will attempt to lead us out of this mess. My greatest hope is that the media will be reformed. Other than Keith Olbermann and Maddow, I find nothing on TV that proffers real and true information.

[MyTake]

Well, Mr. Obama, lets get those economists on the left and on the right (and maybe a couple in the middle too) and put them each on YouTube so the rest of us can EVALUATE their DIRE PREDICTIONS. We can call the video's out in 5 years time to see who was right and who was wrong.

The campaign is over Mr. Obama and you can now square up with the population-at-large and convey specific information when you make statements. You have Bidden making statements that the economy is going to TANK if there is not a second stimulus package. You are making statements that the economy is going to get WORSE before it gets BETTER. Well, tell us exactly what is going to get worse so that we can prepare and buffer the impact.

Come January, when you hit the ground running, there better be a large volume of specific information that you convey to the population to help us organize and fight through this situation caused by the GLOBALIST greed and corruption. Better yet, if you just hired a a dozen cruise ships and rounded up all those on Wall Street and put them out on the ocean for a year and close the stock market for that period of time, things will stabilize fairly quickly. And, of course, abolishing the Federal Reserve and replacing with a true U.S. Central Bank would re-set the economy quickly as well.

[Shaddup]

Remember FDR didn't say a solid word until he was in office. Caution till then, Bush could always declare martial law thanks to our lovely, progressive congress.

[deminmo]

President-elect Obama,
Start with paying off or writing off ALL failing mortgages. Get
people free from the biggest debt. Then, make regulations on
credit card companies stick. If a loophole exists in anything the
lawyers and the bankers will find it. Give each and every tax payer
a BIG stimulus. Not the paltry $1200 top payment that a few got. I
didn't get the full amount the last time! Make this one a $15,000
across the board tax refund. Everyone, regardless of single or joint
filer, with or without kids. Then give states enough cash to update
electric grids, water and sewer systems, and then roads and bridges.
People will have jobs, more jobs will be created for long term prosperity.
STOP giving money with NO accountability to banks and Wall Street.
Start with giving people the hope of the American Dream again!

[GeoLee]

I think you need to get out of your suburban ghetto and go to the malls the middle class people go to and maybe you will see the difference, My nephew's store that did 12,000 dollars of business a day last year is lucky to do that in a week this Christmas season as several stores in the mall his Gamestop is in have shut their doors and people are not coming to shop at that mall. Our city has seen a 20 percent increase in people needing Christmas assistance even though we ahve been in a bubble compared to most cities in the country, but as of two weeks ago, there have been announced layoffs and reduced work times at all five of the aircraft industry plants. You prepare by cutting up credit cards, paying off debts and living more frugally...it is simple, really, but it takes a different mindset. When we stop spending those who charge you 300 dollars for an Ipod that takes a few bucks to make will by necessity have to reduce prices and suck up reducing their profits and the stock owners will just have ot live with less, too.

[deminmo]

It's hard to pay off debt when you lose your job or simply have
hours cut so drastically you don't make enough to pay anything.
My area just lost another maufacturing plant to Mexico. That makes
4 closures in as many years. Which leaves Walmart and other retail
for jobs. The mall I work at is losing stores too, and all hiring has
stopped.

[rich misty]

The GOP has a old idea to solve this economic crisis: hate Americans... They started with Liberals, then all Democrats, then they added Independants... Now it includes anybody who does not accept that the fundamentals of the economy are sound, and that Bush is a GOP economic genius who gave America the best economy in history while winning two wars with one hand tied behind his back while flying his carrier jet.

AND/OR anybody who does not like Sarah Palin

[Tim303]

It's called market fundamentalism...

[paulfree17]

Last month I had to return a leased vehicle. Of course I tried to time it so that there was as little gas as possible left in the tank when I returned it. Why give the leasing company or the new owner free gas that I had paid for?

Well on a much larger scale Bush and Cheney and the Neocons on Wall Street are draining the tank before turning the economy over to the new President. Of course the difference is they did not supply the money they are squandering.

They are trying to leave nothing left with which to implement programs they disapprove of. How can we talk about health care, infrastructure, the environment, education etc when we already have a 1 Trillion dollar debt?

Also, If you look at all the really despotic regimes in the world you will find a very weak middle class. Look at all the dictators and despots that came to power during the last worldwide depression. Hitler, Mussolini, Franco, Peron all came to power during turbulent economic times. A viable middle class focuses on education, freedom and staying informed. An impoverished middle class focuses on economic and personal survival and often will sacrifice liberty and democracy in exchange. The same way many are willing to sacrifice them in the belief of being free from terrorism.

[rich misty]

Bush spent a $1 trillion and we have what, 9000-10,000 American bodies to show for it?

Great deal GOP thanks for the bargains....

[Kassandra]

I believe it's 8 trillion now.........

[greenwitch]

Great post. As much as people think the Bush administration was mind-bogglingly incompetent, I think the truth is much more sinister. One of Bush's economic advisers, Grover Norquist, made his famous quote about making government small enough to "drown in a bathtub." Well, how do you make government small? How about spending it into oblivion so that will be no money for Social Security, Medicare, and all those other "Socialist" programs? Meanwhile, feed all your buddies and campaign contributors at the government trough, while throwing the poor and middle class to the wolves. If that was the Bush administration's plan all along, it's been spectacularly successful.

[dollbaby]

That's why Paulsen wants the other half of the bailout money. The plot sounds dumb but when you really think about it, its so dumb it might just work.

I think the goal here is to leave things in a big mess, turn the tide back to rebuplicans as things don't work out and screw us all some more. PLUS JEB WILLMAKE A GREAT CONGRESSMAN......AND THAN PRESIDENT.

[madisonhack]

I absolutely agree with this post. The FRIDAY BEFORE CHRISTMAS Bush announces the requirements for a LOAN (not a bailout) for the auto industry to include union concessions that may actually cut wages and benefits in half - effectively busting the largest trade union in America. That is the only reason Bush is agreeing to this bailout. He has secretly met with the Republicans of the Senate and those Senators agreed to block the passage of what appeared to be a bipartisan agreement to turn around the Big Three. Then he comes along with his Executive Signing Statement Pen and crushes the UAW with one stroke of it. Voila! He leaves office with a pocketful of undocumented cash for himself and his corporate friends and is again hailed as a successful conservative by his neo-con Kool Aid Club. Another Ronald Reagan...bah!

This will be the end of America as we know it if he succeeds in doing this.

[Kassandra]

Yup. Extension University for learning Chinese. The Chinese are having their own economic problems (because of US=BushCO).....do we think we can keep borrowing from them? We're in for a big surprise.

Tax codes will HAVE to change. We need to stop giving our jobs to people who aren't American citizens and stop hemorrhaging state budgets providing social services, medical care and free educations to HB1 visa holders. And spending $$ on imprisoning them.

Put up the tariffs again. Every other country is doing it, so don't scream "protectionism"

Take a look at what I found in my business email today:

Need A Job or Staff in HK, Singapore, Malaysia, USA? We Can Help.. ( we are now at the level of pay for these other countries, dig it)
http://www.jobsupermart-us.com/