Obama

economic re p ort
of the

president
transmitted to the congress february 2010 together with the annual report of the council of economic advisers

economic re p ort of the president

transmitted to the congress february 2010 the annual report council of economic advisers
united states government printing office washington : 2010
For sale by the Superintendent of Documents, U.S.Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 ISBN 978-0-16-084824-7

together with of the

C O N T E N T S
Page

ECONOMIC REPORT OF THE PRESIDENT ........................................... ANNUAL REPORT OF THE COUNCIL OF ECONOMIC ADVISERS* CHAPTER 1. CHAPTER 2.CHAPTER 3 CHAPTER 4. CHAPTER 5. CHAPTER 6. CHAPTER 7. CHAPTER 8. CHAPTER 9. TO RESCUE, REBALANCE, AND REBUILD .............. RESCUING THE ECONOMY FROM THE GREAT RECESSION ........................................................................ CRISIS AND RECOVERY IN THE WORLD ECONOMY ........................................................................

1 11 25 39 81

SAVING AND INVESTMENT....................................... 113 ADDRESSING THE LONG-RUN FISCAL CHALLENGE ..................................................................... 137 BUILDING A SAFER FINANCIAL SYSTEM .............. 159 REFORMING HEALTH CARE ...................................... 181 STRENGTHENING THE AMERICAN LABOR FORCE ................................................................................. 213TRANSFORMING THE ENERGY SECTOR AND ADDRESSING CLIMATE CHANGE ............................ 235

CHAPTER 10. FOSTERING PRODUCTIVITY GROWTH THROUGH INNOVATION AND TRADE ................. 259 REFERENCES ............................................................................................... 285 APPENDIX A. REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE COUNCIL OF ECONOMIC ADVISERS DURING 2009...................... 305 APPENDIX B. STATISTICAL TABLES RELATING TO INCOME, EMPLOYMENT, AND PRODUCTION ....................... 319

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*For a detailed table of contents of the Council’s Report, see page 15.

iii

economic report president
of the

economic report of the president

To the Congress of the United States:
As we begin a new year, the American people are stillexperiencing the effects of a recession as deep and painful as any we have known in generations. Traveling across this country, I have met countless men and women who have lost jobs these past two years. I have met small business owners struggling to pay for health care for their workers; seniors unable to afford prescriptions; parents worried about paying the bills and saving for their children’sfuture and their own retirement. And the effects of this recession come in the aftermath of a decade of declining economic security for the middle class and those who aspire to it. At the same time, over the past two years, we have also seen reason for hope: the resilience of the American people who have held fast— even in the face of hardship—to an unrelenting faith in the promise of our country.It is that determination that has helped the American people overcome difficult periods in our Nation’s history. And it is this perseverance that remains our great strength today. After all, our workers are as productive as ever. American businesses are still leaders in innovation. Our potential is still unrivaled. Our task as a Nation—and our mission as an Administration—is to harness thatinnovative spirit, that productive energy, and that potential in order to create jobs, raise incomes, and foster economic growth that is sustained and broadly shared. It’s not enough to move the economy from recession to recovery. We must rebuild the economy on a new and stronger foundation. I can report that over the past year, this work has begun. In the coming year, this work continues. But to...