After a month of political back-and-forth, President Barack Obama's plans to address the most daunting U.S. economic crisis in 80 years are coming into focus. Speaking to a joint session of Congress on February 24, Obama outlined his strategy to rescue the struggling financial sector while simultaneously directing resources toward overhauling longer-term policy problems in U.S. health care, energy, and education. In doing so, Obama said the country's "day of reckoning has arrived" after a period of financial and political irresponsibility.
"We will rebuild, we will recover, and the United States of America will emerge stronger than before," he said.
Obama vowed that American banks would be held "fully accountable" for the way bailout funds are spent, and that he would use the government's authority to compel banks to resume lending. On a more basic level, he sought to shore up faith in the financial system, saying "the money you've deposited in banks across the country is safe; your insurance is secure; and you can rely on the continued operation of our financial system."
The historic speech built on an unprecedented series of moves since the president took office barely a month ago aimed at staving off economic disaster by bailing out banks and stimulating the U.S. economic activity. On February 17, Obama signed a $787 billion economic stimulus package, including major outlays for infrastructure development. Days earlier, Treasury Secretary Timothy Geithner unveiled plans for a $2.5 trillion bank bailout package (NYT) making use of funds from the government and private investors and calling for the U.S. Federal Reserve to print more money. But markets continued to tumble (FT), reaching ten-year lows before rallying slightly as the new president put the finishing touches on his speech.
Analysts remain divided about how successful over how or...