Yesterday, President Obama delivered an address in large part concerning the credit downgrade and the economy. (The transcript is seen at WhiteHouse.gov titled “Remarks by the President“)
Although I don’t agree with many aspects of the speech, I found various parts of this speech to be notable. Here are various facets that I found particularly noteworthy:
The markets, on the other hand, continue to believe our credit status is AAA. In fact, Warren Buffett, who knows a thing or two about good investments, said, “If there were a quadruple-A rating, I’d give the United States that.” I, and most of the world’s investors, agree.
So all of this is a legitimate source of concern. But here’s the good news: Our problems are eminently solvable.* And we know what we have to do to solve them. With respect to debt, our problem is not confidence in our credit — the markets continue to reaffirm our credit as among the world’s safest. Our challenge is the need to tackle our deficits over the long term.
What we need to do now is combine those spending cuts with two additional steps: tax reform that will ask those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare.
Of course, as worrisome as the issues of debt and deficits may be, the most immediate concern of most Americans, and of concern to the marketplace as well, is the issue of jobs and the slow pace of recovery coming out of the worst recession in our lifetimes.
And the good news here is that by coming together to deal with the long-term debt challenge, we would have more room to implement key proposals that can get the economy to grow faster. Specifically, we should extend the payroll tax cut as soon as possible, so that workers have more money in their paychecks next year and businesses have more customers next year.
We should continue to make sure that if you’re one of the millions of Americans who’s out there looking for a job, you can get the unemployment insurance that your tax dollars contributed to. That will also put money in people’s pockets and more customers in stores.
I know we’re going through a tough time right now. We’ve been going through a tough time for the last two and a half years. And I know a lot of people are worried about the future. But here’s what I also know: There will always be economic factors that we can’t control –- earthquakes, spikes in oil prices, slowdowns in other parts of the world. But how we respond to those tests — that’s entirely up to us.
Markets will rise and fall, but this is the United States of America. No matter what some agency may say, we’ve always been and always will be a AAA country. For all of the challenges we face, we continue to have the best universities, some of the most productive workers, the most innovative companies, the most adventurous entrepreneurs on Earth. What sets us apart is that we’ve always not just had the capacity, but also the will to act — the determination to shape our future; the willingness in our democracy to work out our differences in a sensible way and to move forward, not just for this generation but for the next generation.
And we’re going to need to summon that spirit today. The American people have been through so much over the last few years, dealing with the worst recession, the biggest financial crisis since the 1930s, and they’ve done it with grace. And they’re working so hard to raise their families, and all they ask is that we work just as hard, here in this town, to make their lives a little easier. That’s not too much to ask. And ultimately, the reason I am so hopeful about our future — the reason I have faith in these United States of America — is because of the American people. It’s because of their perseverance, and their courage, and their willingness to shoulder the burdens we face -– together, as one nation.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1132.34 as this post is written