In a press conference this afternoon, Pres. Obama touched on the possibility of a second stimulus package. Here are a few excerpts:
Q[uestion] ..Mr. President…Last week you acknowledged that unemployment is likely to reach double digits, being 10 percent. Do you think you need a second stimulus package?
THE PRESIDENT: Well, not yet, because I think it’s important to see how the economy evolves and how effective the first stimulus is. I think it’s fair to say that — keep in mind the stimulus package was the first thing we did, and we did it a couple of weeks after inauguration. At that point nobody understood what the depths of this recession were going to look like. If you recall, it was only significantly later that we suddenly get a report that the economy had tanked.
And so it’s not surprising then that we missed the mark in terms of our estimates of where unemployment would go. I think it’s pretty clear now that unemployment will end up going over 10 percent, if you just look at the pattern, because of the fact that even after employers and businesses start investing again and start hiring again, typically it takes a while for that employment number to catch up with economic recovery. And we’re still not at actual recovery yet.
So I anticipate that this is going to be a difficult — difficult year, a difficult period.
Q What’s the high water mark, then, for unemployment? Eleven percent?
THE PRESIDENT: Well, I’m not suggesting that I have a crystal ball. Since you just threw back at us our last prognosis, let’s not — let’s not engage in another one.
Q Does that mean you won’t be making predictions ever? (Laughter.)
THE PRESIDENT: But what I am saying is that — here are some things I know for certain. In the absence of the stimulus, I think our recession would be much worse. It would have declined — without the Recovery Act — we know for a fact that states, for example, would have laid off a lot more teachers, a lot more police officers, a lot more firefighters, every single one of those individuals whose jobs were saved. As a consequence, they are still making their mortgage payments, they are still shopping. So we know that the Recovery Act has had an impact.
Now, what we also know is this was the worst recession since the Great Depression, and people are going through a very tough time right now. And I don’t expect them to be satisfied. I mean, one thing that — as I sometimes glance at the various news outlets represented here, I know that they’re sometimes reporting of, oh, the administration is worried about this, or their poll numbers are going down there — look, the American people have a right to feel like this is a tough time right now. What’s incredible to me is how resilient the American people have been and how they are still more optimistic than the facts alone would justify, because this is a tough, tough period.
And I don’t feel satisfied with the progress that we’ve made. We’ve got to get our Recovery Act money out faster. We’ve got to make sure that the programs that we’ve put in place are working the way they’re supposed to. I think, for example, our mortgage program has actually helped to modify mortgages for a lot of people, but it hasn’t been keeping pace with all the foreclosures that are taking place. I get letters every day from people who say, you know, I appreciate that you put out this mortgage program, but the bank is still not letting me modify my mortgage and I’m about to lose my home. And then I’ve got to call my staff and team and find out why isn’t it working for these folks, and can we adjust it, can we tweak it, can we make it more aggressive?
This is a very, very difficult process. And what I’ve got to do is to make sure that we’re focused both on the short term, how can we provide families immediate relief and jumpstart the economy as quickly as possible; and I’ve got to keep my eye on the long term, and the long term is making sure that by reforming our health care system, by passing serious energy legislation that makes us a clean energy economy, by revamping our education system, by finally getting the financial regulatory reforms in place that are necessary for the 21st century — by doing all those things, we’ve got a foundation for long-term economic growth, and we don’t end up having to juice up the economy artificially through the kinds of bubble strategies that helped to get us in the situation that we’re in today.