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WASHINGTON, DC—President-elect Barack Obama and a new Congress will take office in less than 70 days amid the greatest financial market and economic challenges our nation has faced since the Great Depression. The economy is likely in a recession—one that could be a long and deep. We are engaged in two wars overseas. Skyrocketing health care costs are consuming too great a share of our economy and threatening to create an unsustainable national debt. Our continued heavy reliance on fossil fuels exposes our economy to volatile oil prices and supply disruptions as well as the potentially catastrophic costs of climate change in the coming decades.
Aggressive action is needed to restore economic confidence and growth. We need action now to stimulate the economy, starting at once and lasting as long as necessary. Immediate government investments can put us on a path to recovery while also speeding the arrival of accessible, affordable health care, an economy powered with clean, sustainable, and secure sources of energy, and an education system that prepares our children for good jobs and keeps good jobs in America. These steps will help the economy through a period of economic weakness and lay the foundation for shared economic growth in the decades to come.
These investments in economic stimulus and recovery will contribute to a higher budget deficit in the short term. But we cannot be penny wise and pound foolish. Strong economic growth will do far more to put us on the path of fiscal health than shortchanging needed investments today.
The serious economic threats facing our economy are more urgent than this year’s budget deficit, but we also need start quickly to restore financial discipline and the public’s confidence in government. Even as we are spending more in the short term, we must make a serious commitment to scrub the budget of inefficient and ineffective programs and tax incentives, make tough choices among competing priorities, and address the sustainability of Medicare and Social Security—the looming fiscal challenge in the coming decades—in the context of reform of the social safety net to provide retirement and health care security.
Our economy has reached these dire straits after years of mismanagement and neglect. It cannot be rebuilt overnight. We need a sustained economic agenda that focuses on building the foundation for a brighter future.
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