SYDNEY: Days after the Australian Prime Minister Kevin Rudd announced his governments Economic Stimululas Package, US President Barack Obama has trumped Rudd’s deficit creating strategy by 100’s of Billions of Dollars. Is this worldwide trend toward debt truly a prudent way to propup economies, what price will we have to pay down the road for economies that are so debt laden that they are near on insolvent?
WASHINGTON: After weeks of negotiations with Congress, President Barack Obama took to the airwaves Monday night to make his case for the passage of a more than $800 billion stimulus package to revive the economy. He said the package was not perfect, but, “the federal government is the only entity left with the resources to jolt our economy back to life.” Obama painted a grim picture of the economy he inherited, which he said underscored the need for the passage of the stimulus.
“My hope is after a difficult year, and this year is going to be a difficult year, that businesses start investing again … consumers start feeling their jobs are stable and safe and start making purchases again,” Obama said. Predicting another year of recession may be realistic, but it is hardly confidence boosting ::::
For confidence Obama had this to say, “I am absolutely confident that we can solve this problem.” If, that is, Congress starts by passing the stimulus package.
Obama’s first primetime press conference as president is part of a White House publicity blitz to sell his strategy to the public. Earlier Monday, the president made a targeted pitch at a town hall meeting in Elkhart, Ind., where unemployment reached 15.3% in December. Tuesday, Obama takes the same message on the road to Florida. Meanwhile, Congress is struggling to come up with a bill to send to the president’s desk–a process Obama wants to see resolved quickly.
On Monday the Senate voted to end debate on its version of the legislation, with an estimated price tag of $838 billion, by a vote of 61 to 36. On Tuesday, they will vote–likely with the same number of supporters–to pass the legislation.
Members of the House and Senate will then meet to reconcile the Senate package with the $819 billion plan passed by the House. Despite nearing passage, hopes for a bipartisan bill have been squashed. Only three Republicans in the Senate–Olympia Snowe and Susan Collins of Maine and Arlen Specter of Pennsylvania–and not a single Republican in the House–supported the legislation.Obama listed the efforts he made to win Republican support for the passage, such as visiting the Hill to meet with Republican lawmakers or inviting them to the White House, and said his attempts “were not designed simply to get some short term votes, they were designed to build up some trust over time.”But the president also had sharp words for the Republicans in Congress. He emphasized several times that both the crisis and deficit were inherited from their party and questioned their reticence toward government spending. “I’m not sure that they have a lot of credibility when it comes to fiscal responsibility,” Obama said.
The president also defended many of the specifics of the legislation, such as spending to improve the energy efficiency of government buildings, to rebuild schools, and to digitize health records. They are all projects, he said, that would create jobs now and pay dividends in the future with lower energy bills, better educated students and less medical errors.When asked whether or not the administration would be asking for more money, Obama indicated that at least initially they would wait to see what they can accomplish with the funds that have already been allocated. Though he declined to discuss specifics before the Tuesday announcement, he emphasized the need to restore confidence and bring private capital back to the banks. “Ultimately the government cannot substitute for the private capital that has been withdrawn from the system,” Obama said.
Obama outlined the form he hoped the recovery would take: beginning with saving and creating jobs, restoring orderly functioning in the credit markets, stemming the rate of foreclosures leading to the eventual stabilization of house prices. The biggest measure of success, he said, would be when the economy stops contracting.
The economy, the deficit and the financial bailout were bequeathed. But the stimulus package is all Obama’s. And in a year’s time its success can be judged against his own benchmarks.