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2009年1月13日 (火)



--The Asahi Shimbun, Jan. 10(IHT/Asahi: January 12,2009)

EDITORIAL: Obama addresses crisis


Just 12 days before taking office on Jan. 20, U.S. President-elect Barack Obama, in an address on his economic policy, laid out a plan to deal with the economic crisis. It is highly unusual for a president-elect to make such high-profile policy pronouncements before actually being sworn in.


Since he was elected in November, Obama has acted swiftly and vigorously in preparing for his administration's handling of the crisis, appointing his economic team much earlier than usual.


Obama's aggressive actions raised hopes of an early economic recovery among the American people, helping to temporarily lift the Dow Jones Industrial Average above 9,000.


But the latest employment data, showing a further deterioration of the job situation, provoked rumblings that it could be too late if Obama waited until his inauguration to announce his plan to tackle the economy.


The unprecedented speech was apparently his response to a growing sense of crisis among Americans.


In the Thursday speech, Obama candidly talked about the nation's perilous economic outlook.


"If nothing is done, this recession could linger for years," he warned. "The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four."


"In short, a bad situation could become dramatically worse."


Obama was apparently trying to dampen expectations among Americans of an early economic upturn.


In the address, Obama reiterated his intention to save or create at least 3 million jobs over the next two years through a fiscal stimulus package worth up to $775 billion. The amount represents more than 5 percent of the country's gross domestic product.


The centerpieces of the package are tax cuts and public works spending.


The envisioned tax cuts focus on middle-class and low-income households in line with Obama's campaign promises. In addition, the new administration would also cut corporate taxes to stimulate job creation and business investment.


Obama's public spending programs include projects to build and enhance infrastructure like roads and bridges and modernize schools and other public facilities, investments in energy-saving technologies and a program to computerize medical records for better and more efficient health care.


The U.S. government is already in crisis mode, seemingly ready to take all necessary policy measures to save the sinking economy.


U.S. policymakers created a $700-billion rescue fund to restore stability in financial markets and made dramatic monetary policy moves. Monetary authorities lowered the benchmark interest rate to virtually zero and launched a quantitative easing program to inject money directly into the economy at the end of last year.


The proposed fiscal expansion is expected to increase the U.S. budget deficit for fiscal 2009 to a record high of well above $1 trillion.


Obama has warned about the prospect of "trillion-dollar deficits for years to come." To put a floor under the deepening global recession, it is vital to prevent the bottom from falling out of the U.S. economy.


Obama wants to get the bills to implement his economic plan enacted as soon as possible, preferably in early February. But the political climate is not necessarily favorable for the policy prescriptions he believes will get the economy moving again.


In an apparent effort to win support for his package from Republicans who prefer tax cuts to spending increases, Obama has promised to spend about 40 percent of the amount on tax cuts.


But calls for additional measures and revisions to his plan are growing among both Democrats and Republicans, raising concerns about a delay in getting the legislation passed.


But U.S. lawmakers must avoid any replay of the legislative debacle over the financial rescue bill last autumn, when Congress' initial rejection of the bill triggered a stock market tumble.


It is, however, unclear whether Obama's package, even if it is implemented smoothly, will even produce the desired results.


If Obama fails after expending a great deal of political capital, fears of a mammoth U.S. budget deficit could destroy confidence in the dollar, the world's key currency.


Undoubtedly, Obama has a long and tricky policy challenge ahead of him, much like trying to walk on the the edge of a sword.


The world is pinning its hopes on strong, proactive leadership from Obama.



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