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."