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Obama: Economy is "going to get worse"

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Obama's prescription?

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The President-elect sounded cautious and appeared to be managing expectations by again emphasizing that the short-term isn't going to be rosy.  Instead, the focus had to be more long-term.

"Fortunately as tough as times are right now, things are going to get worse before they get better," he prefaced.  "There is a convergence between circumstances and agenda," he said.  "The key for us is making sure that we jump start that economy in a way that doesn't just deal with the short term - doesn't just create jobs immediately - but also puts us on a glide path for long term economic growth," he said.

How?

How do you get there?  Obama referenced his Saturday morning radio address where he outlined what needed to be done.

-  Make public buildings more energy efficient.

Make the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s.

Modernize and upgrade school buildings.

-  Expand broadband availability.

-  Modernize the healthcare system through cutting edge technology.

When?

A focus on the longterm doesn't mean there can't be any immediate relief.  Obama said

"I think we can get a lot of work done fast," he said.  "When I talked to the governors - all of them have projects that are shovel-ready that will require us to get the money out the door.  They've already lined up the projects and they can make them work."

Doom

Obama sounded much more confident than former Labor Secretary Robert Reich who questioned on Friday if we should be describing our economy in terms of a depression rather than a recession.

"We are falling off a cliff," Reich wrote in his blog.  "To put these numbers into some perspective, the November losses alone are the worst in 34 years. A significant percentage of Americans are now jobless or underemployed - far higher than the official rate of 6.7 percent. Simply in order to keep up with population growth, employment needs to increase by 125,000 jobs per month."

"When FDR took office in 1933, one out of four American workers was jobless. We're not there yet, but we're trending in that direction," he said.

Transfusion

Although Obama may not agree with that analysis he did liken the state of the US economy to an ailing patient when discussing the budget deficit.

"We've got to provide a blood infusion to the patient right now and make sure the patient is stabilized and that means we can't worry short-term about the deficit.  We've got to make sure the economic stimulus plan is large enough to get the economy moving."

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