Obama Promises More of the Same
January 8, 2009 · Posted in General Economics
MarketWatch writes Obama issues fresh sales pitch for stimulus plan:
“There is no doubt that the cost of this plan will be considerable,” Obama said in a speech at George Mason University in suburban Virginia.But, said the president-elect, “if nothing is done, this recession could linger for years.” Read the speech.Obama has made a stimulus plan the centerpiece of his incoming administration, calling for a huge spending and tax-cut plan worth about $800 billion. His aim is to create or save at least 3 million jobs over the next few years.“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,” Obama said, telling congressional leaders he wants to work with them on days, nights and weekends to get a plan passed “in the next few weeks.”Obama said the consequences of inaction would be grim. He said unemployment could reach double digits, the economy could lose $1 trillion, or $12,000 for a family of four. He warned that fewer young Americans would be able to go to college or receive adequate job-training. He predicted the nation could lose its competitve edge.“In short, a bad situation could become dramatically worse,” the President-elect said.But Obama faces the challenge of stimulating the economy while trying to keep Washington’s budget deficit under control — a prospect that he acknowledges isn’t possible in the short term. Aware of the dangers, he and his team of economic advisers are studying ways to lessen the flow of red ink in years to come.While there is agreement on the need to stimulate the economy, some Republicans are differing with Obama over the size of the package and the efficacy of the proposed tax cuts. About 40% of the stimulus plan, or $300 billion, would be taken up by tax cuts. About a third of those cuts would go to businesses in an effort to spur new investments.Obama is calling for a central role for the government in the recovery, but he also said Thursday that the financial system needs to be overhauled and that Wall Street wrongdoers must be caught before they can do any damage.
Obama will be inaugurated as the 44th president on Jan. 20.
In essence, this is what Obama said in his speech:
We need to change course immediately. We will do this by spending enormous sums of money. (…like we have been doing for decades.)
We need to cut taxes. We will do this and at the same time spend more than we ever have. (… by borrowing more money from China.)
So far President-elect Obama has absolutley no idea how to battle the crisis. He is surrounded by a group of clueless fools who are outbidding each other with horrible recommendations.