January 8th, 2009
03:27 PM ET

Obama's dire economic warnings...

Program Note: Be sure to tune in tonight to watch Tom Foreman report on the how some people are struggling with the economic downturn on AC360° at 10pm ET.

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/POLITICS/01/08/transition.wrap/art.obama.gi.jpg caption="Barack Obama says failure to act quickly on his economic plan would have devastating consequences."]

President-elect Barack Obama on Thursday said Congress must take "dramatic action" on his economic aid package as soon as possible, warning that a failure to do so would have devastating long-term consequences for the nation. Here are a few of the President-elect's warnings:

Obama's Warnings:
“We start 2009 in the midst of a crisis unlike any we have seen in our lifetime – a crisis that has only deepened over the last few weeks. Nearly two million jobs have now been lost, and on Friday we are likely to learn that we lost more jobs last year than at any time since World War II.”

“If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. We could lose a generation of potential and promise”

“In short, a bad situation could become dramatically worse.”

“There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short-term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy.”

“ For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse. “

“ I know the scale of this plan is unprecedented, but so is the severity of our situation. We have already tried the wait-and-see approach to our problems, and it is the same approach that helped lead us to this day of reckoning.”

More bad news
– Unemployment: tomorrow the numbers expected to look ugly
– Walgreens announced layoffs – 1,000 today

Retail numbers...also bad news
– Wal-Mart reported a 1.7% gain in same-store sales excluding fuel in December. That was less than the 2.8% increase
– Target down 4.1% last month.
– Sears down 7.3% drop in its same-store sales,
– Macy's down 4% drop in its comparable store sales. The company also announced it was closing 11 underperforming stores.
– Limited Brand owner of Victoria's Secret and Bath & Body Works chains, said its same-store sales tumbled 10%
– Gap sales fell 14%
– Toys R Us said its combined November and December sales at its domestic stores fell 3.4%

And even more bad news...annual job losses report due tomorrow

Annual job losses on a seasonally adjusted basis stand at 1,911,000 through November. That currently ranks third all-time. The 1,911,000 will likely be adjusted for November, and possibly other prior months.

Here are the top 5 annual losses right now:
– 1945: 2,750,000
– 1982: 2,130,000
– 2008: 1,910,000
– 2001: 1,760,000
– 1949: 1,510,000

Monthly Job Losses..to come tomorrow:
The number is due tomorrow. If December comes in as forecast (500,000), it would be below the 34-year high of 533,000 originally reported in November (which will be revised). Here are some mileposts to determine the last time we would have had a bigger number:

– Up to 431K – worst since May 1980, a 28-1/2 year high (assumes major downward revision for November)
– From -432K to -602K: Worst since December 1974. Once again, a 34-year high.
– From -603K to -629K: Worst since July 1956. A 52-year high
– From -630K to -834K: Worst since Oct. 1949. A 59-year high
– From -835K to -1.966 million: Worst since Sept. 1945. A 63-year high
-1.967 million or more: Record job loss.

Filed under: Barack Obama • Economy • Unemployment
soundoff (15 Responses)
  1. A.M. Deist, Fort Walton Beach FL

    Just as you can't dig your way out of a hole, you can't spend your way out of bankruptcy.

    January 8, 2009 at 8:36 pm |
  2. jrqqqq

    I figured yesterdays Power Lunch with all the Presidents would bring this. I'm scared and yet, Obama's honesty makes me sleep at night.

    I think we will be okay as long as the HILL listens to him. Any veto will hurt the WHOLE of us.

    But strangely, what is falling down around us might not have been meant to be.

    We have to many people getting paid under the table in construction. To many high salary Policiticans. To many Walmarts and a Walgreens every 1 mile.

    I don't remember when people stopped Saving at their banks. Why did we stop?

    Let's let some of this fall and rebuild on a strong foundation!

    ps (I am still scared)

    January 8, 2009 at 8:02 pm |
  3. Lenny Schmitt

    I have 9 employees and my business is booming. Congressman Jessie Helms gave me a hand up years ago. I quit school after the ninth grade, I was in and out of jail and addicted to drugs. To make things worse I was in a car accident that left me permanently disabled. Congressman Helms ignored my past and gave me a new chance. I now own my own business and my annual salary is over $200, 000.00 a year. I have also written and published two books. Our politicians may not aways get it right but they truly want all of us to do well. Our country was built on giving people a chance to do their best I hope it stays that way. I fear our generation will be known as the bailout generation.

    January 8, 2009 at 7:30 pm |
  4. Kristie Holliday

    Ummm Cindy, I concur with Gene. BTW we were in a recession for some time now. Personally I think the depression is at the front door and the package will absolutely do some good. His package is extrememly drastic! If it simply puts a meal on the table, keeps someone from foreclosing on their home and loan, pays an overdue cell phone bill or their kids tuition and orthodontist. Come on, it'll keep money flowing instead of going nowhere, like right now.

    Obama's warning is called communication. Something we didn't get alot of from the sitting Pres. (Intelligent, anyway) Speaking of the sitting Pres, what's he doing about it today or last week or Nov 3rd or 4th or 5th? Has anyone heard? I haven't. All I hear is what is Obama going to do WHEN he can do something. We do still have a president right? I'm just saying.

    And Irv, WOW!!! What a history lesson. Too bad we're not all paying attention. I appreciate it though.

    Las Vegas

    January 8, 2009 at 7:20 pm |
  5. Megan Bliesner - Greensboro, NC

    I'm with Cindy... These are not warnings. Everyone knows already. I can't wait for everyone to stop TALKING about it and actually DO something about it.

    January 8, 2009 at 7:20 pm |
  6. Lora Mengucci

    The thing I believe is that we stop agreeing with what is being promoted by the government and get productive. Government control is not the answer. It is the individual and groups of individuals who pull together and make things go right. There is hope and it starts with us, "we the people..."

    January 8, 2009 at 6:54 pm |
  7. GF, Los Angeles

    I'm glad at least Obama is trying to do something – whether it's going to help or not we'll see. We're in a load of trouble so as the incoming leader of this mess, I support him in at least stopping this bleeding. It's not going to get fixed overnight that's for sure.

    January 8, 2009 at 5:41 pm |
  8. Amanda Walton--Algonquin Park

    These are very scary numbers. I'm now waiting for those numbers to start landsliding north in the next 6 months. Canada hasn't seen it's worst yet as we are always behind on catching up. There is a formula out there that can save total destruction from happening, the question is which formula will it be?

    It's scary knowing this much money will be pushed into the system praying it isn't to much, to late.

    January 8, 2009 at 5:07 pm |
  9. Benigna Marko

    What we need to do is stand behind our President. Stop all the ifs, in fact, can he be President so we can get on with the new challenges. Try not to be as critical as we have been about our President Bush. He has done an outstanding job considring what he has had to put up with from all the negativity and critisim. Give these guys a break and let them show us they can run our country. Nothing is perfect and we sure do contribute in thinking that things are. Relax and let things happen. One thing for sure President Bush has kept our country safe and we should be applauding him and his administration. Of course, no one wants war, but we do want our freedom. Both sound incredibly complicated. Benigna Marko

    January 8, 2009 at 4:48 pm |
  10. JC-Los Angeles

    What's most alarming of all is the fact that our leaders, executives and politicians are outling the fall of our nation post facto and as if no one saw it coming.

    Was a nationwide spending frenzy really the panacea for 9/11? was an octogenarian like Greenspan really in tune with today's gluttonous consumption, materialistic, morally bankrupt societal mindset?

    If one had no real job, no real savings and no real credit worthiness, should they have bought a home? two homes? three? should investment banks been buying those loans? huh, say what? come again?

    If we replaced everyone, would the replacements be so bad that they would need $700 billion? highly doubt it.

    January 8, 2009 at 4:37 pm |
  11. Lorie Ann, Buellton, California

    Only time will tell if Obama and team have the right answer. There's no sure thing about any of this. I guess we just have to hope for the best.

    January 8, 2009 at 4:35 pm |
  12. Alenka

    $775 billion: Expected cost of the economic stimulus plan.
    $1.2 trillion: Projected federal deficit for 2009

    $30 billion: Annual shortfall to end world hunger.

    Political priorities by the numbers. Read more about it on the Borgen Project website (borgenproject.org)

    January 8, 2009 at 4:22 pm |
  13. Irv Crouse

    I was 15 years old at time when the Stock Market crashed in 29. I remember it well. My father had a job working for 35.00 a week and we were one of the fortunate ones.Three of us children graduated High School with little thought of going to College. Instead we found work at 25 cents an hour. At the same time. gasoline was 15 cents a gallon, cigarettes 2 packs for a quarter, butter `5 cents a pound, etc.,.

    This recession is a different breed of cat. It might be controlled totally differently in order to swing it around. CCC and various similar projects worked well then but will not now. Population at that time was around 140 million mark, considerably lower than now. If you need more, just say the word. Irv

    January 8, 2009 at 4:03 pm |
  14. Gene Penszynski from Vermont

    It is pefectly correct for Prsident-elect Obam to tell us the worst case scenarios and what we must do to avoid them. Telling us as G W Bush did only months before his distorted greedy version of 'Capitalism' came crahing down around our ears that the fundamentals of HIS Massive Ponzi scheme were OK has done far worse damage than Mr. Obama simply hitting us with the harsh realities of G W Bush's mistakes and how difficult it's going to be to correct them.

    January 8, 2009 at 3:44 pm |
  15. Cindy

    UMMM...Obama doesn't have to warn anybody about this economic mess and how serious it is. I think that we can all see that very clearly!

    I for one don't think his package will do that much for us. I think we have to just ride this thing out to the end. It may soften the blow but what's done is done already. We are in a recession and possibly headed into a depression and I think in order to change that something extremely drastic would have to be done.


    January 8, 2009 at 3:35 pm |