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Obama urges action on stimulus
President-elect Barack Obama's image appears on screens on the floor of the New York Stock Exchange as he gives a speech on his economic plans for the country. Obama warned of consequences if Congress does not inject billions of dollars to stimulate the national economy.
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TEXT OF STORY
Kai Ryssdal: On the one hand it was a typical presidential speech that Barack Obama gave today. Lots of new programs and big promises. But there was a very definite message, too. Now. Congress has got to get going now on his economic stimulus plan. But doesn't anybody else remember what happened last time Congress rushed to authorize $700 billion? Marketplace's John Dimsdale reports from Washington.
John Dimsdale: The president-elect painted a dire financial future if Congress fails to enact a huge government spending program for roads, education, health care and technology.
President-elect Obama: If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall one trillion dollars short of its full capacity, which translates into more than $12,000 in lost income for a family of four.
Obama's warning was only slightly less ominous than President George Bush's pitch for the Troubled Asset Relief Program last September.
President Bush: The government's top economic experts warn that without immediate action by Congress, America could slip into a financial panic.
Congress approved $350 billion for TARP, although those troubled assets were never purchased. The Treasury Department decided instead to make direct investments in banks. But Alan Levenson, the chief economist at T. Rowe Price says this time, Congress will ask for more details.
Alan Levenson: The TARP was: 'give us the capacity to do something. We're not sure what.' I think that there is going to be a little bit more specificity about what Congress is enacting than with the TARP.
And Levenson says the next president is less inclined toward hyperbole.
Levenson: Obama is, by his nature, not a person to try to sow panic with those kinds of statements. He doesn't want to use works like catastrophe, panic, crash. But putting a number on it, like a trillion dollars, does get people's attention.
Congress is no longer expecting to have a stimulus package ready by Inauguration Day. More realistic predictions are for the middle of February. The momentum is there, if not all the specifics.
In Washington I'm John Dimsdale for Marketplace.
I say that no more bailouts and large scale cash dole outs. President Elect was also for the $700 billion and he should also be asked why if the $700 billion did not help what is the guarantee that another $800 billion will help? Congress and them think that money grows on trees at tax payers expense). All these job creation on infrastructure, to me, amounts to seasonal job. Where is the plan that will create sustainable jobs in the long run? Show us the plan to bring the jobs back home. We need to have plans to build our manufacturing base. A nation can not survive and grow on a service economy. It must grow in basic and braod based manufacturing and not just in defense and aerospace which just caters to the military-industrial complex.
Any cash that is given out to anybody, including states, should be loans that need to be paid back with interest. The only person that are eligible to get cash should be taxpayers - since they contributed to the pot. But, what we hear is that taxpayers should get $10 or $20 back in paychecks since they can plan and budget this way - according to lawmakers and economists (what ingenious mind and behavior readers they must be).
We ought to definitely go for term limits in Congress!
ah yes, the same Bush administration that scared us, telling us if we didn't invade an Iraq the UN couldn't find WMDs in like, right now, the smoking gun could be a mushroom cloud, lied to us--excuse me, Congress--about how quickly the bailout of the top was needed.
Again, I'll state, the bailout should have been at the bottom. Keep people in their homes, they pay local taxes so local businesses don't see their rates go up. Homeowners buy durable goods. And paying the loans makes the banks solvent again, by making their books look good. What does cash on hand do when they aren't giving it out?
The counterargument was, the mortgages are bundled too close together, they are too hard to understand. As the "Made-off" scandal shows us, when a financial scheme is too difficult to understand how it works, that's probably because...it doesn't work.
It took us generations to get here. The best investment in America has been real estate scandals like the S&L's, and now subprimes? That's a real bad sign. That's why we need to invest in labor, or raw materials, or new technology in infrastructure or energy or anything else that can be sold to other countries.
The payoff will take a while to reveal itself, but investing in what got us into trouble, just to get out of it, returns us right back. Don't forget, low oil prices means no investment in new oil fields, so high fuel prices will come back soon.
Try as they might. They will only succeed at patching up the holes as our financial boat floats at level down. Unless our Prez. Elect places the scalpel aside and cuts away the deadwood at the top with a chainsaw. Just so he can then see what they were Hiding.
"But doesn't anybody else remember what happened last time Congress rushed to authorize $700 billion?"
Queer comment, coming from Marketplace. I remember Kai was practially rabid in his support. Marketplace interviewed someone who labeled anyone opposed to the bailout a "whiner." Losers.
