No assurance of US economic recovery this year – Obama

WASHINGTON – President Barack Obama said he could not assure Americans the recession-mired U.S. economy would start growing again later this year, The New York Times said on Saturday. “I don’t know that anyone has that kind of crystal ball,” Obama told the Times in a story on its website. In an interview aboard Air Force One on Friday, the president said that he expected his administration, which took office on January 20 amid the worst economic crisis in decades, to “get all the pillars in place for recovery this year” and he urged Americans to keep spending and not “stuff money in their mattress.”

But he stopped short of saying when he thinks the economy might turn around. “How long it will take before recovery actually translates into stronger job markets and so forth is going to depend on a whole range of factors,” Obama said.

Obama’s comments were not as upbeat as the projections underlying the federal budget he recently presented that suggested the economy would start bouncing back in the second half of 2009. His proposed budget  included a “placeholder” estimate of $250 billion for additional bank  bailouts on top of the hundreds of billions already allocated.

“We have no reason to revise that estimate that’s in the budget,” he said when asked whether he could say with certainty that he would not ask Congress for money above and beyond the placeholder. He urged American not to mistrust the entire financial system but said, “There may be a handful of institutions that have more serious problems, and what we want to do is to cauterize the wound.”

Asked whether some of those would have to fail, he said, “No, no, no, no. But what we’ll have to do is, we’ll probably have to take more significant action to deal with those institutions.”