Obama fears a double dip recession

Obama Recession Fears

"If we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the US economy in a double-dip recession."

Wouldn't it be nice for the President to come out and say how good the American economy will be once we emerge from recession, and not about how bad it could soon get...

In an ideal world, the answer would obviously be yes. But Obama appears to be a new breed of politician - one that favours brutal honesty over stylized vagueness. He would rather prepare the American people for the worst, rather than leave them horribly surprised when everything doesn't work out OK after all.

Trying to boost the economy and bring debt under control

As the US unemployment rate now runs at 10.2 percent, the President said his administration faced a delicate balance of trying to boost the economy and spur job creation while bringing the rising deficit and debt under control.

"One of the trickiest things we're doing right now, is to on the one hand make sure the recovery is supported and not withdraw a lot of money either with tax increases or big spending ... at the same time, making sure that we're setting up a pathway long term for deficit reduction," he said.

"It's about as hard of a play as there is."

His comments came in a television interview with Fox News in Beijing during an eight day tour of Asia.

Reigning in national debt has become a priority

Reigning in national debt has become a priority for Washington, further compounded by Obama's remarks a few days earlier to the Asia Pacific Economic Cooperation where he said, "debt-driven growth cannot fuel America's long-term prosperity."

Obama's struggle to drag America out of recession is daunting in its size, but his administration has been impressive in its response.

Treasury borrowing is expected to increase for several years as the US tries to pay off the cost of pulling itself out of the crisis, and the early numbers for an improved deficit are not encouraging.

But the government has done well sticking to its plans for spending, and the stimulus package has brought many successes - notably in the automotive and green energy sectors.

The public are unlikely to take heart from the thought of a second recession, but may find solace in the President's honest assessment of the future. A steady hand and level head will prove valuable as Obama juggles between cuts in government spending or increases in taxes in an effort to cast off the shackles of recession.

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