THE PRESIDENT: Good. For those of you who've studied economic history and the history of the Great Depression, what Tom is referring to is, Roosevelt comes in -- FDR comes in, he tries all these things with the New Deal; but FDR, contrary to myth, was pretty fiscally conservative. And so after the initial efforts of the New Deal and it looked like the economy was growing again, FDR then presented a very severe austerity budget. And suddenly, in 1937, the economy started going down again. And, ultimately, what really pulled America out of the Great Depression was World War II.
And so some have said, I think rightly, that we've got to be careful that any efforts we have to reduce the deficit don't hamper economic recovery, because the worst thing we can do for the deficit is continue to have really bad growth or another recession.
So what I've tried to emphasize in this balanced package that we've talked about is how do we make a serious down payment and commitment to deficit reduction but, as much as possible, focus on those structural long-term costs that gradually start coming down, as opposed to trying to lop off everything in the first year or two, and how do we make sure that as part of this package we include some things that would be good for economic growth right now.
So back in December we passed a payroll tax cut that has saved the typical family $1,000 this year. That's set to expire at the end of this year. And what I've said is as part of this package we should renew that payroll tax cut so that consumers still have more in their pockets next year until the economy gets a little bit stronger.
I've said that we have to renew unemployment insurance for another year because obviously the economy is still not generating enough jobs and there are a lot of folks out there who are hugely reliant on this. But it's also unemployment insurance is probably the money that is most likely to be spent. By definition, people need it, and so it re-circulates in the economy and it has an effect of boosting aggregate demand and helping the economy grow.
So as much as possible, what I'm trying to do is to make sure that we have elements in this package that focus on growth now. And then I think it's going to be important for us to, as soon as we get this debt limit done, to focus on some of the things that I mentioned at the top: patent reform, getting these trade deals done, doing an infrastructure bank that would help to finance the rebuilding of America and putting a lot of workers who've been laid off back to work. We don't have time to wait when it comes to putting folks back to work.
Now, what you'll hear from the other side is the most important thing for putting people back to work is simply cutting taxes or keeping taxes low. And I have to remember -- I have to remind them that we actually have sort of a comparison. We have Bill Clinton, who created 22 million jobs during the eight years of his presidency, in which the tax rates were significantly higher than they are now and would be higher even if, for example, the tax breaks for the high-income Americans that I've called for taking back, even if those got taken back taxes would still be lower now than they were under Bill Clinton, but the economy did great; generated huge amounts of jobs. And then we had the eight years before I was elected, in which taxes were very low, but there was tepid job growth.
Now, I'm not saying there's an automatic correlation. But what I am saying is that this theory that the only thing -- the only answer to every economic problem we have, the only answer for job creation is to cut taxes for the wealthiest Americans and for corporations is not borne out by the evidence. (Applause.) And we should be a little more creative in how we think about it. (Applause.)
The last thing I'll say, because we've got a lot of young people here, I know that sometimes things feel discouraging. We've gone through two wars. We've gone through the worst financial crisis in any of our memories. We've got challenges environmentally. We've got conflicts around the world that seem intractable. We've got politicians who only seem to argue. And so I know that there must be times where you kind of say to yourself, golly, can't anybody get their act together around here? And what's the world that I'm starting off in, and how do I get my career on a sound foundation? And you got debts you've got to worry about.
I just want all of you to remember, America has gone through tougher times before, and we have always come through. We've always emerged on the other side stronger, more unified. The trajectory of America has been to become more inclusive, more generous, more tolerant.
And so I want all of you to recognize that when I look out at each and every one of you, this diverse crowd that we have, you give me incredible hope. You inspire me. I am absolutely convinced that your generation will help us solve these problems. (Applause.) And I don't want you to ever get discouraged because we're going to get through these tough times just like we have before, and America is going to be stronger, and it's going to be more prosperous, and it's going to be more unified than ever before, thanks to you. (Applause.)
God bless you all. God bless America. (Applause.)
END 12:07 P.M. EDT