Washington In sheer size, the economic measures announced by President Barack Obama to address “a crisis unlike we’ve ever known” are remarkable, rivaling and in many cases dwarfing the New Deal programs that Franklin D. Roosevelt famously created to battle the Great Depression.
Winning approval was a political tour-de-force for the new administration.
Yet gloom and uncertainty persist about the plan’s ability to deliver a cure for the economy’s severe ailments.
Stocks plunged to six-year lows after the burst of bill signings, bailout announcements and presidential pledges.
And polls show Americans are increasingly worried about losing jobs and not having enough money to pay their bills.
Why the skepticism?
Maybe there’s just been too long a run of bad news.
Arthur Hogan, chief market analyst at Wachovia Securities, blames much of the negativity on “the fact that people are so down. They have no confidence in the future.”
Republicans complain about wasted money. Some Democratic supporters say the plan won’t help very much very quickly.
Former President Bill Clinton, who gives Obama high marks for straight talk in telling the nation the bad economic news, says his successor might try a more upbeat approach now. “I just want the American people to know that he’s confident that we are going to get out of this and he feels good about the long run,” Clinton said Friday on ABC News’ “Good Morning America.”
Patience, pleads the administration. Lawrence Summers, Obama’s chief economics adviser, says the success of the plan will be measured “not by daily market reaction but what happens over time.” Still, he says, “We are moving rapidly.”
No matter how people feel about the plans, they are undoubtedly ambitious — and expensive. Tomorrow’s taxpayers will still be paying for them long after Obama is out of office.
So far in his month-old presidency:
• Congress passed and Obama signed into law a record $787 billion mix of tax cuts, job-creating projects and aid to struggling states.
• The president pledged up to $275 billion in federal aid to help stem a tidal wave of home foreclosures.
• The Treasury Department and the Federal Reserve announced financial-rescue steps that could send up to $2 trillion coursing through the economy.
In all, the plans would raise the federal portion of the U.S. economy to some 31 percent, more than twice the level after eight years of FDR’s historic New Deal spending.
“All Americans have a stake in making this work,” says Treasury Secretary Timothy Geithner.
But you wouldn’t know it from the reaction.
Rather than the bipartisan support Obama first sought, Republicans remain in near unanimous opposition. They contend that the stimulus package is tainted by wasteful spending and that the mortgage-foreclosure plan leaves out many struggling homeowners while rewarding lenders and borrowers who made bad decisions. Some Republican governors from the South even talk of spurning the new federal money.
Even while supporting the initiatives, some Democrats suggest the efforts won’t deliver enough quick help to make a difference, despite the eye-popping price tags.