As he has several times weekly since the onset of the financial crisis, President Bush appeared on the South Lawn of the White House to give a brief statement on the economy, taking no questions.
As per usually, he reiterated the steps his administration is taking to pump up the financial and housing markets and he did again but this time with a difference: A year after the downturn was officially deemed to have started, the president admitted the country was in a recession.
It was a day of grim economic news, including the monthly unemployment report. "Today’s job data reflects the fact that our economy is in recession." The job data he referred to showed that the economy shed 533,000 jobs in November, far worse than anticipated and the biggest one-month loss of jobs in 36 years. That brings the total number of jobs lost in the year to date to 1.7 million.
The unemployment rate rose from 6.5 percent to 6.7 percent and is forecast to get as high as 8.5 percent next year.
Bush called on Congress to redirect $24 billion in previously approved money to Big Three automakers and to do so next week. At times Bush has seemed curiously detached from the financial crisis — perhaps because in barely six weeks it will be someone else’s problem and showed that by adding, "And it’s important to make sure that taxpayers’ money be paid back if any is given to the companies." If there was any guarantee the money could be paid back, the automakers wouldn’t need a bailout from Uncle Sam.
Uncle Sam is having problems of its own with bailout investments in supposed blue chip financial institutions. The Associated Press reports that the $27 billion in stock intended to eventually earn taxpayers a profit as part of the Bush administration’s massive bank bailout has lost a third of its value — about $9 billion — in barely one month.
The Treasury’s explanation is that it is not day trading but in for the long term.
It could be a very long term. The Congressional Budget Office said the government ran $408 billion deficit in just the first two months of the current fiscal year. The government ran a deficit of $455 billion for all of last year and that was a record. Between the bailouts and slumping revenues, the government is currently on course to run deficit of over $1 trillion.
However long this recession lasts — and the two longest postwar recessions both lasted 16 months — we’re going to be forever paying for it.