Vice President Joe Biden Addresses the Recovery Act at the Brookings Institution

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Transcript
Vice President Joe Biden Addresses the Recovery Act at the Brookings Institution

Thursday, September 3, 2009; 11:52 AM


Thank you very much, Strobe.

(APPLAUSE) It's a pleasure to be back. And I told Strobe in the anteroom that, "Mr. Secretary, the many, many times that I've been here, almost always the subject has been foreign policy, and I hope I have an opportunity to come back and discuss some of those areas at a later date."

But today, I want to talk about the economy, specifically the Recovery Act. President Obama and I when we entered office, we were in the midst of what I refer to as the great recession. It seemed that every day that we woke up from the day we were sworn in there was a new revelation to be added to the economic parade of horribles, that we -- some of which we had anticipated.

Americans were seeing their savings decimated by losses in the stock market, watching it tank. Housing values were collapsing. People were losing their savings, as well as their home. Major banks -- it's hard to remember this, even though it's only been eight months ago -- major banks were on the verge of failure, closure. People were talking about shuttering the doors.

There was actually a serious discussion among economists we brought in from the outside during the interim period between the election and being sworn in where there was discussion by some very serious economists about a bank holiday maybe being necessary.

We were -- we were on the verge of failure. Credit was frozen. Businesses couldn't borrow for inventory, much less expand or hire; as a matter of fact, even to keep the employment force they had.

Credible economists were handicapping the possibility of a true depression. As Nobel Prizewinner Paul Krugman wrote in January of 2009 in the New York Times, he said, "Let's not mince words. This looks an awful lot like the beginning of the second Great Depression."

BIDEN: A look at some of the headlines at the time is a reminder of just how precarious our situation was eight months ago.

Quote: "The financial sector can't be relied on to keep U.S. economy humming." Headline: "No One Home. Record 1 in 9 Housing Units Empty. Vacancies Have Ripple Effect." Headline: "Economy Strains under Weight of Unsold Items." Headline: "Automakers Bankruptcy Looms." Headline: "Credit Freeze Leaves Thousands of Student Borrowers Stuck in Default." Headline: "Governments Brace for Hard Times: Some Have Frozen Hiring and Postponed Major Projects." Headline: "New Poor Swell Lines of Food Banks."

In the face of this mounting disaster, we, along with everyone in this room, knew action had to be taken. And we took action in three areas.

First, we had to stabilize the financial system. We took the very unpopular, but necessary, step of rescuing the banks. And now, although there's a long way to go, eight out of 10 of the largest financial institutions in America, including Goldman, Morgan Stanley, American Express, as well as 16 smaller banks, have repaid the government in full, and, I might add, at a $4 billion profit for the taxpayers.

Second, along with the Fed, we took action in stabilizing the housing market, allowing responsible homeowners to stay in their homes. And we're beginning to see the results of that.

We just learned that new housing starts rose 10 percent in July, for the fourth straight month increase.

Are we there yet? No. But we're moving.

Two hundred days ago, President Obama signed into law the third piece of our economic plan, the American Recovery and Reinvestment Act. And today there's a growing consensus the Recovery Act is, in fact, working. We don't -- don't just take my word for it. Analysts from Moody's to IHS Global Insight (ph), to the Economic Policy Institute and others all estimate the Recovery Act has created or saved between 500,000-750,000 jobs.

As a matter of fact, some notable economists suggest that the number is as high as a million.

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