US economy 'much worse'

2008-12-20 08:14

Washington - Vice president-elect Joseph Biden, in his first interview since the November 4 election, told ABC TV that the US economy was in "much worse shape" than he thought and needed a second stimulus package to prevent it from tanking.

"The economy is in much worse shape than we thought it was in," Biden told ABC's George Stephanopoulos in an interview to be broadcast on Sunday.

He said a second big stimulus package would be needed to keep from "absolutely tanking".

"Every single person I've spoken to agrees with every major economist. There is going to be real significant investment, whether it's 600 billion or more, or 700 billion, the clear notion is, it's a number no one thought about a year ago," he added.

He said president-elect Barack Obama's team was absolutely focused on creating jogs and spending on energy and information technology infrastructure to get the economy on the right path.

Recovery package

"There is no short run other than keeping the economy from absolutely tanking. That's the only short run," Biden said in an extract of the interview provided to AFP.

He said all other foreign and domestic policy objectives of the Obama administration, which takes office on January 20, depend entirely on turning the US economy around.

"The single most important thing we have to do as a new administration ... is we've got to begin to stem this bleeding here and begin to stop the loss of jobs in the creation of jobs," he added.

Obama on Friday also said that a "bold" stimulus plan was needed to pull the US economy out of recession.

"I won't give you a number, because we are still making these evaluations," Obama said at a press conference.

"What we've seen, in terms of the evaluation of economists from across the political spectrum, is that we're going to have to be bold when it comes to our economic recovery package."

Obama expressed confidence in his ability to steer the country out of recession but warned a solution to the "daunting" challenges he will inherit when he takes office.

"It will take longer than any of us would like - years, not months. It will get worse before it gets better," Obama said.

- SAPA