Obama aims to involve entire US in economic turnaround

January 21st, 2009 - 12:34 pm ICT by IANS  

Barack ObamaWashington, Jan 21 (DPA) US President Barack Obama hopes to revive the country’s economy not only with a massive government spending package but by restoring the confidence of average Americans, a task that began with his inauguration speech.Obama, who took office Tuesday, inherits a recession that could be the worst economic downturn since the Great Depression of the 1930s. But he also faces soaring expectations from US citizens weary of a financial crisis that has cut sharply into stock values and retirement investments and already left millions jobless.

In his rhetoric, Obama tried to strike a delicate balance between realism and optimism, warning that the crisis will not be solved quickly while also offering a vision of US resilience.

Just minutes after being sworn in Tuesday as president, Obama said the economy had been “badly weakened”. He noted a “sapping of confidence across our land” and a “nagging fear that America’s decline is inevitable”.

“The challenges we face are real. … But know this, America: They will be met,” Obama said.

Obama plans to meet with his economic advisers on Wednesday to outline a strategy for reversing the country’s fortunes. An $825 billion stimulus package - a mix of government spending and tax relief - is already making its way through the Congress, which is controlled by Obama’s centre-left Democrats.

But easing the fears of ordinary Americans will be critical to reviving US consumer spending, which has plummeted in recent months as unemployment swelled by more than 2.5 million workers in 2008 and banks have cut off access to credit in a desperate effort to survive the ongoing financial crisis.

Obama seemed to stress a new point that was largely avoided during the election campaign, suggesting the fundamentals of the economy were strong despite the current crisis.

“We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when the crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished,” Obama said.

Last year, Obama seized on a remark by Jon McCain, his centre-right Republican opponent for the presidency, who had remarked that the “fundamentals” of the US economy remained “strong” despite the financial crisis. He criticized McCain as “out of touch” with the tribulations of middle-class workers in the US.

Yet convincing people to reinvest in the world’s largest economy will be key to Obama’s efforts to boost spending. While touting his plans for an $825-billion government stimulus package, the incoming president called on all citizens to do their part.

“Starting today, we must pick ourselves up, dust ourselves off and begin again the work of remaking America,” Obama told the estimated 1.8 million people gathered for his swearing-in on Washington’s National Mall.

Obama indicated that he would not cede any ground to those who question US-style free markets, the limits of which have been laid bare by a financial crisis sparked by excessive gambles in the housing market by Wall Street investors.

French President Nicolas Sarkozy and other leaders have suggested a dramatic rethinking of capitalism may be needed.

Obama said the market system’s “power to generate wealth and expand freedom is unmatched”, but he also acknowledged that more oversight of the financial system was needed.

Those convictions will be tested early in his administration. One of Obama’s first major trips abroad will be in April for a London summit of the world’s 20 leading economies, intended to map out a long-term solution to the financial crisis threatening to plunge the entire world into recession.

While he defended the capitalist system, Obama did suggest his administration will direct the market’s spoils toward lower-income workers rather than the wealthy, a key theme of his presidential campaign and a not-so-subtle attack on outgoing Republican president George W. Bush.

“A nation cannot prosper long when it favours only the prosperous,” Obama said.

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