Recession may get worse, Obama warns

Published on Thursday 8 January 2009 20:59

BARACK Obama yesterday warned that the recesssion in the United States could drag on for years unless the country agreed to pump record amounts of cash into the economy.

"I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible," he said.

"A bad situation could become dramatically worse," he said, painting a dire picture – including massive unemployment and $1 trillion in lost economic activity – that recalled the dark days of the Great Depression in the 1930s.

Presidents-elect normally stick to naming administration appointments during the transition period between Election Day and Inauguration Day, but Mr Obama has clearly made the calculation that a nation anxious about its economy needs to hear from him frequently.

Consumers and companies are folding under the forces of a collapsed housing market, global credit crunch and the worst financial crisis since the 1930s.

The US recession, which started in December 2007, is already the longest in 25 years.