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Bush: US will be 'stronger than ever before'

Latest update : 2008-07-15

US President George W. Bush gave a press conference Tuesday about the state of the economy, on the heels of the Fed announcement to bail out US mortgage lenders.

With the US economy showing clear signs of distress, US President George W. Bush sought to reassure Americans on Tuesday that their financial system is sound and that the economy is not in a recession.

 

“We will come through this challenge stronger than ever before,” he said in his first full press conference since late April.

 

He focused on recent steps taken to stabilize the housing and financial markets.

 

Douglas Herbert, FRANCE 24’s Business Editor, said the speech was largely predictable. “This is a preprogrammed press conference to reassure the American people during a week of turmoil that the system is basically sound.”

 

He reassured Americans that the current world financial turmoil would not affect their personal savings, as all commercial banks are insured for up to $100,000 under the FDIC.

 

He fielded the hot-button issues of the day, including the proposed Federal Reserve package to bail out ailing mortgage lenders Freddie Mac and Fannie Mae.

 

“People are saying it’s a ‘bailout’, he said. “This is not a bailout. The shareholders still hold the company.”  He emphasized that the measures would be temporary and that there was no danger of a slippery slope effect, in which the US government would be required to bailout more and more banks.

 

Bush said that this stimulus package is a one-off deal, and aimed at assuaging the American public. “It’s important that people have confidence in mortgage markets,” he said.

 

Herbert said, “I’m not that reassured. They’re saying now that Freddie Mac and Fannie Mae are too big to let fail.  But we might see a lot of smaller banks that are on the government radar screen for insolvency, and they might decide those are not ‘too big to let fail.’  Then they’ll go under. So then what happens?”

 

Regarding rising gas prices, Bush said, “I don’t have a magic wand. I can’t just say ‘low gas.’”  As part of a solution, he discussed the controversial matter of drilling off the US coastlines to find new oil reserves.  “It makes sense to me to explore for oil and gas… We need to help change the psychology, send a clear message that supplies of oil will increase.”

 

Offshore oil has been banned since 1992, prohibiting oil rigs 200 miles off the US coastline.  Democrats have taken the position that drilling so near the coast would pose significant environmental risks, and require too much initial financial outlay to see rapid returns on the investment.

 

Date created : 2008-07-15

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