A plan for recovery

Our view : President-elect Obama's prescription for America's troubled economy is expensive but necessary to ensure a swift recovery from an extraordinary set of economic ills

November 09, 2008

President-elect Barack Obama's aggressive plan to deal with the worst economic crisis since the Depression will be expensive but is vital to putting more than 2 million unemployed workers back on the job and giving an economic boost to the middle class. Mr. Obama laid out highlights of his proposal Friday when the scale of America's economic trouble was bleakly apparent by the latest jobless figures - the unemployment rate had jumped to 6.5 percent with the loss of 240,000 jobs in October. The same day, General Motors and Ford reported multibillion-dollar losses that if continued could sink the two auto giants within a year. His plan targets the middle class, his core constituency, with tax cuts for families earning less than $250,000 and a 13-week extension of unemployment benefits.

The proposal could add trillions to the national debt in coming years, but for those who question whether the nation can afford it, the answer is simple. In our view, the nation can't afford not to respond aggressively to an economic downturn that can be devastating if not confronted. A substantial investment now is more likely to mean a swifter comeback. The Dow Jones industrial average rose more than 250 points after Mr. Obama's remarks, an encouraging sign.

Democrats have been discussing a rescue package totaling about $100 billion that might be passed in a special session of Congress later this month to provide funds for public works, assistance for states hit by declining tax revenues and hard-pressed manufacturers, possibly including General Motors and Ford. The White House has been balking at the size of that proposal, saying initiatives taken under a recently passed $700 billion rescue package should be given a chance to work.

But it is clear that more help is needed. And Mr. Obama rightly vowed to pass it come January if the package remains stalled.

Beyond implementing the emergency rescue plan, Mr. Obama intends to move forward with efforts to reform the nation's faltering health care system and to remake America's energy industry. As a new president, he can marshal public support for these initiatives that won't be easily or quickly achieved. Mr. Obama's planned $15 billion-a-year investment in alternative energy should pay off big by creating thousands of high-skill jobs in new green industries while sharply cutting the nation's imported energy bill and opening new global export markets for energy technology.

Most important, Mr. Obama's program, laid out with his signature unflappable demeanor, promises to restore Americans' confidence in a brighter economic future, and that should ultimately provide the jobs and fuel the middle-class spending needed to make the nation thrive again.

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