Market Analysis

U.S. President Barack Obama called on Congress to support economic growth in the country at the expense of additional tax breaks, government subsidies and incentive programs.

In his first address to Congress a report on the situation in the country (State of the Union), he stressed the need for legislative reform, especially in regard to financial sector regulation and public health, writes The Wall Street Journal.

President pledged to do everything possible to ensure an increase in the number of jobs in the country and sustained economic growth.

In contrast to his predecessor, George Bush, Obama focused on the financial and economic issues and much less talked about terrorism and military action, political analysts note.

Unemployment remains one of the central problems of the economy

As Obama said, decisive and immediate action by the Government last year kept the economy from a repeat of the Great Depression, and now you can say that the worst is over. However, not all problems are solved, and one of the most important American president named unemployment, as currently in the United States is 10% of the unemployed.

Obama defended the program incentive amount $ 787 billion approved last year in the crisis. According to him, these measures saved the jobs for 2 million Americans in 2009, and save or create another 1.5 million jobs before the end of this year.

"Workplaces must be our top priority in 2010, and that is why I call today a new bill on the workplace," - said the president.

Tax credits will support economic growth

One of the necessary conditions for the creation of new jobs Obama believes the extension introduced in last year"s tax benefits totaling $ 38 billion in 2010 and 2011. The American president considered one of the important achievements of his administration that in 2009 95% of working American families pay less taxes.

Tax credits help companies, especially small businesses, to accelerate the acquisition of means of production and modernization of enterprises.

For ordinary Americans a tax cut means a simplified mortgage, increasing tax credits for child care, cheaper education. As a consequence, consumer spending on food, fuel, basic necessities and other goods and services are growing that supports the economy in general, believes Obama.

"We all hated the bailout"

According to the American president, was forced to rescue banks, unpopular, but absolutely necessary step.

"Our most urgent task was to support the very banks that helped arrange the crisis. It was not easy. And if that"s the united Democrats and Republicans on this issue, so this is what we all hated the bailout. I hated him. You hated him. All this was just as popular as a hole in the tooth "- Obama said.

However, these measures have helped to stop the destruction of the financial system, preventing further sharp rise in unemployment, bankruptcy of enterprises, the problems in the housing market.

Obama offered to send a small business $ 30 billion from the money the big banks

In his address to Congress, Obama said of the need to support small businesses through large banks.

"I propose that we take $ 30 billion from Wall Street banks and used them to support local banks to issue loans to small businesses, to keep it afloat," - said the U.S. president.

Obama said he is not seeking to punish banks that largely caused the current crisis. "I"m interested in how to protect our economy," - he says.

Financial reform should be the starting point of growth

starting point for work to restore and protect the American economy should be the financial reform, I am sure Obama.

"A strong and healthy financial market makes it impossible for businesses to access credit, and create new jobs. He sends the household savings into investments that increase revenue, - Obama said. - But this can only happen if we will oppose irresponsible, which almost destroyed our economy ", - said the U.S. president.

This should give consumers access to information, enabling them to make wise financial decisions.

"We can not allow financial institutions, including those that store your contributions, take risks that threaten the economy as a whole," - said Obama.

U.S. President plans to do everything possible to his proposed bill on financial reform was implemented in full.

state budget deficit should be reduced, but not at the expense of important programs

Obama outlined to Congress plans to reduce the budget deficit, in particular, the freezing of a number of discretionary government spending over the next three years.

However, it is assumed that cost reduction would not affect such vital areas as defense and public security. Costs priority discretionary programs - education, health - will be increased.

According to Obama

important aspect of overcoming the fiscal deficit is to restore confidence in the government. For years, party discussions that it is important for Americans, and the growing influence of lobbyists "have sown deep and destructive doubts of Washington."

To restore public confidence in Barack Obama proposed to introduce rules on the disclosure of contacts lobbyists and to restrict their influence and their financial support to candidates for public office.

U.S. may lose global leadership

Barack Obama urged the U.S. to keep up with China, Germany and India.

"These countries are not standing still, they are not playing for second place, they would be paying much attention to math and science as they rebuild their infrastructure, they are making serious investments in clean energy, because they want to create new jobs," -- Obama said.

He said that will not take "second place for America in the world."

"As difficult as it may, how unpleasant it may be, it"s time to take to remedy the problems that hinder our growth," - called on Obama.

"How long are we supposed to wait?" And how long can you delay the future of America? "- he said. - In the meantime, China is not waiting for the modernization of its economy, and Germany does not expect, and India will not wait."

President has tasked the U.S. goal of doubling exports in the next 5 years, but did not call on Congress to approve free trade agreements with South Korea, Colombia and Panama.

reaction of the public and the markets

Democrats, as expected, welcomed the statement by Obama, Republicans were more restrainf32ed, but they could find in the presidential address the positive aspects.

leader of the Republican faction in the Senate, Mitch McConnell noted the importance and timeliness of the focus on jobs, but did not fail to rebuke the U.S. president and his administration of squandering money and time to reform health care.

reaction in business circles has been mixed, wrote The New York Times. Small business owners met with the President of treatment with enthusiasm, but the top managers of large enterprises said the weakness and disorganization in solving the problems of unemployment and other economic problems.

incentive program "does not give the results that are needed to halt the loss of jobs," suggests CEO of one of the largest steel companies in the U.S. Nucor Dan DiMikko.

Stock markets in Asia and U.S. index futures rising in the morning on Thursday after Obama"s speech. Dollar exchange rate against the euro has appreciated and remains at a peak for 6 months.

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