BARACK OBAMA'S administration in waiting signalled yesterday that it was preparing the biggest economic stimulus in US history to avert mass unemployment in a stuttering economy that could face the toughest recession in half a century.
In a programme tinged with environmentally friendly initiatives, the US president-elect has set a new target of creating or safeguarding three million jobs, by unleashing an avalanche of government spending and offering widespread tax rebates.
The Obama camp indicated that the package would be worth between $675 billion (€485 billion) and $775 billion, easily eclipsing other packages in China, Japan and Britain. The cash will include programmes to transmit wind and solar energy across the US and to put millions of medical records into digital format.
Mr Obama's vice-president elect, Joe Biden, yesterday said the stimulus was the "singlemost important thing" facing the new administration and warned that action was needed to prevent the economy from "absolutely tanking".
"The economy is in much worse shape than we thought it was in," Mr Biden told ABC television.
"We've got to begin to stem this bleeding, stop the loss of jobs and create new jobs."
Approximately 1.9 million US jobs have been lost this year and Mr Obama's aides have briefed him that as many as four million could be at risk, which would take the unemployment rate to 9 per cent. Quoting transition officials, the New York Timessaid Mr Obama's team feared the downturn could eclipse anything in the last 50 years.
At a brainstorming session on Friday, Mr Obama's economic team grappled with ways to address the subprime mortgage crisis, the credit crunch and a slump in consumer spending that has left shopping centres strikingly quiet this Christmas.
Among the proposals is the creation of a smart power grid to broaden the transmission of wind and solar power.
A limitation of green power generation is that windfarms and large-scale solar panels are easier to site in remote areas, leaving a challenge in taking energy to centres of population.
Mr Biden said such a project would create tens of thousands of jobs and would have long-term benefits. He said "every major economist", from left to right on the political spectrum, agreed that "direct government spending now is the best way to infuse economic growth".
When pressed on the short-term risk of inflating the US's trillion-dollar budget deficit, Mr Biden said: "There is no short run other than keeping the economy from absolutely tanking." - ( Guardianservice)