Jan 8, 2009, 15:52 GMT
Washington - US president-elect Barack Obama warned Thursday that the recession in the United States could grow 'dramatically worse' and last for years unless 'bold' policies are enacted to reverse the trend.
Unemployment could rise into double digits and the US economy could lose 1 trillion dollars of its capacity as the country copes with the poorest economic conditions since the Great Depression of the 1930s, Obama said.
'I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible,' Obama said in a major speech on the economy at George Mason University just outside Washington in Fairfax, Virginia.
Obama and his economic advisors are working on a stimulus plan reportedly at a value of up to 1 trillion dollars to pump money into the economy by investing in infrastructure projects, healthcare, education and alternative energy sources. Obama wants the plan ready to go when he takes office January 20.
The president-elect acknowledged that his stimulus plan will increase the federal deficit beyond the current mark of 1.2 trillion dollars, but said that government spending was the only way to pull the economy out of its current downward spiral.
'But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes and confidence in our economy,' Obama said.
He blamed the economic crisis on bad corporate decision-making on Wall Street, where risky loans designed to boost profits faltered, sparking a crisis in the finance industry and a credit freeze that quickly engulfed the rest of the economy.
'We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington,' Obama said.
He said regulatory scrutiny of Wall Street business practices was too ineffective and that Washington must move to create better oversight. He also called on Congress to cut wasteful spending on pet projects in their home states or districts.
'The result has been a devastating loss of trust and confidence in our economy, our financial markets, and our government,' he said.
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