U.S. Representative and House Budget Committee Chairman John Spratt (D-SC) spoke at a hearing today about the economy beginning to recover due to the Recovery Act. Spratt said that before Barack Obama took office, the economy was in dire straits.
“Seven months ago, when President Obama took office, the country was on the brink of a financial meltdown,” said Spratt. “Credit was frozen. Home mortgages, many of them sub-prime were being foreclosed at record rates. The country was losing an average of 700,00 jobs a month. The stock market had lost nearly $10 trillion in wealth and headed downward.”
He says that the Obama administation and Congress made some difficult choices and because of that there are signs the economy is strengthening. “Congress and the Obama administration took action, bold action” he said. “The boldest came in late February when we enacted the The American Recovery and Reinvestment Act. An unprecedented act but so were the circumstances.
“The Recovery Act has begun to bear fruit though we still have miles to go before we can say we’re at full recovery, a full economy. We are no longer faced with the severe, critical financial conditions that we found at the beginning of this year.”
He says that though The Recovery Act has increased the debt, there is an upside. According to Spratt, “The economic recession that began under the previous administration has taken it’s toll on the federal budget, no doubt about it, leaving the Obama administration and the congress with a massive deficit. That’s the bad news. A deficit or a trillion seven, a trillion eight this year. The good news is that many of the conditions that are swelling the deficit to these unprecedented levels are non-recurring, one time events.”