Inheriting a series of economic problems on a scale not seen since the Great Depression, new U.S. President Barack Obama will have a hard time reviving the nation's sagging economy.
In his speech after being sworn in as the 44th president of the United States on Tuesday, Obama acknowledged the daunting challenges facing the nation, saying "we are in the midst of crisis is now well understood."
"Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered," Obama said.
The U.S. economy, stuck by the current financial crisis, has been in a recession since December 2007, according to the National Bureau of Economic Research, a semi-official arbiter of recession.
Many economists believe the current downturn will be the most severe since the Great Depression in 1930s.
Economists polled by Reuters expected the American economy to contract at an annualized 4.3 percent in the last three months of the year, and to continue to shrink through the first six months of 2009.
The No. 1 priority, Obama has promised, is to get Congress to approve an economic stimulus plan that would extend jobless benefits, send food aid to the poor, dispatch Medicaid funds to states and spend tens of billions of dollars on public works projects.
House Democrats have presented an 825 billion dollars stimulus package, surpassing the already huge 700 billion dollars former President George W. Bush used for his financial rescue package.
The stimulus plan, which Obama hopes to be passed by mid- February, will help save or create 4 million jobs.
The bulk of the package -- about 550 billion dollars -- would be used to build new schools and highways, invest in energy and health-care projects and provide unemployment and health benefits for out-of-work Americans.
The rest would provide more than 300 billion dollars in tax cuts for enterprises and individuals. If approved, most workers would get about a 500 dollars tax cut in their paychecks.
The tentative schedule calls for the full House to vote Jan. 28 on the package, with the Senate considering the bill during the first week of February.
"We are facing the greatest economic challenge of our lifetime, and we're going to have to act swiftly to resolve it," Obama pledged.
Like Franklin Delano Roosevelt and Ronald Reagan, Obama, the new president, will get a rare opportunity to leave a sweeping and long-lasting imprint on the U.S. economy.
In his recent ABC interview, Obama said the bulk of his stimulus plan would go toward spending on public works projects and on such initiatives as laying down broadband lines and making homes and government buildings more energy efficient.
Obama believed such projects delivered "the most bang for the buck" because they provided jobs to people, enabling them to spend more, which has ripple effects throughout the economy.
However, many lawmakers began questioning specifics of the plan, and dashed expectations for a quick vote. Some of the strongest objections can be found with Obama's Democratic party.
"How much lift is that going to give?" asked Senate Budget Chairman Kent Conrad. "I don't think there's much bang for the buck there."
The Democratic lawmaker urged greater emphasis on initiatives that will to shore up the housing market, among other things. "We don't have unlimited money," he said. "We've got to target."
Joseph Stigliz, the Nobel laureate economist from Columbia University, supported the stimulus plan but worried about the result of the further tax cuts.
"We are in uncharted territory in this crisis," he said. " Household tax cuts, except for possibly the poorest, should have no place in the stimulus. Nor should business tax breaks, except when closely linked with additional investment."
Obama also knows the difficulty, but he has noted that he was confident that "a new president can have an enormous impact."
"The need for us to act is now. It's never been more urgent," Obama said in a recent speech, warning that "recovery won't happen overnight, and it's likely that, even with these measures, things will get worse before they get better."
(Xinhua News Agency January 21, 2009)