WASHINGTON - PRESIDENT Barack Obama invited investors on Tuesday to consider buying battered stocks, calling them 'a potentially good deal' a day after a global sell-off sent them to their lowest level since 1997.
Mr Obama's unusual message came as his top economic aides defended his budget plans from charges it rests on a blend of tax increases and overly rosy growth projections and tried to beat back charges he was on 'a spending binge'.
Treasury Secretary Timothy Geithner told the tax-writing House Ways and Means Committee that the blueprint was 'realistic' but acknowledged 'it does predict a somewhat more rapid recovery than some private forecasters predict'. 'We'll be very careful to make sure that we're looking at this with a cold, hard set of eyes' during a future review of the US$3.55-trillion (S$5.5 trillion) budget's underlying economic assumptions, he promised.
Not quite six weeks since taking office in a paralysing recession, the president said slumping stocks were a 'natural reaction' to global contagion but that the market's 'day-to-day gyrations' should not drive long-term policy.
'It bobs up and down day to day, and if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong,' he said as he met with visiting British Prime Minister Gordon Brown.
'Profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it,' Mr Obama said.
And he declared that he was 'absolutely confident' that his budget, bank rescue plans reaching into the hundreds of billions of dollars, and a US$787-billion economic stimulus package would revive the US economy.
But Republican Senate Minority Leader Mitch McConnell charged that Mr Obama, with a complicit Congress, had in 2009 alone 'spent more money than we spent on Iraq, Afghanistan, and the response to Katrina'. Speaking after a handful of Democrats joined Republicans in a failed attempt to freeze government spending in 2009 at 2008 levels, Mr McConnell declared: 'We think the spending binge needs to be stopped.' Mr Geithner told House members, who echoed that sentiment and flayed what they denounced as budgetary 'gimmicks' used to deflate the deficit, 'we're going to keep at this until we fix it'. 'Looks like someone is cooking the books,' Republican Representative Kevin Brady said. -- AFP