United States president-elect Barack Obama said on Saturday that he was crafting an aggressive, two-year stimulus plan to revive the troubled economy, warning that swift action was needed to prevent a deep slump and a spiral of falling prices.
”If we don’t act swiftly and boldly, most experts now believe that we could lose millions of jobs next year,” Obama said in prepared remarks for the weekly Democratic radio and video address.
”We now risk falling into a deflationary spiral that could increase our massive debt even further,” he said.
A day after US stock markets rallied on his apparent choice of Timothy Geithner as Treasury secretary, Obama gave a bleak assessment of the economy in his most detailed comments on the subject since winning the November 4 election.
Obama in October called for a $175-billion stimulus measure, but his comments in the radio address on Saturday signalled he was prepared to push for a much larger package, though he did not give a price-tag.
He said the plan would set a goal of creating 2,5-million more jobs by January 2011 and would be ”big enough to meet the challenges we face”.
The proposal for a two-year stimulus plan further indicated a sizable effort. Most such plans are aimed at covering a one-year period.
The number of Americans on the unemployment rolls HAS surged to the highest in 16 years, up more than 540 000, the Labour Department said on Thursday.
Government data also painted an increasingly dire picture of the housing market.
”The news this week has only reinforced the fact that we are facing an economic crisis of historic proportions,” Obama said.
The president-elect and his team have worked to lower expectations that he will be able to fix the economic challenges right away, a theme he reiterated in his address.
”There are no quick or easy fixes to this crisis, which has been many years in the making, and it’s likely to get worse before it gets better,” Obama said.
Obama, who takes over from President George Bush on January 20, said he had directed his economic team to draft the stimulus proposal and predicted the Democratic-led Congress would quickly approve it for his signature.
”We’ll be working out the details in the weeks ahead, but it will be a two-year, nationwide effort to jump-start job creation in America and lay the foundation for a strong and growing economy,” Obama said. — Reuters