Summers: Obama to keep jobless rate below 10%

Larry Summers, the incoming director of the National
Economic Council, predicted Sunday that President-elect Obama would keep the
unemployment rate below 10 percent.

“I think while we’re going to see substantial job losses,
frankly what’s important about the president’s program here is that it is going
to contain what would otherwise be just a vicious cycle,” Summers said on CBS’s
“Face the Nation”. “People spend less, therefore, others earn less, therefore,
they spend less.”

{mosads}Summers said that Obama has received a “terrific response”
from Congress on his plan for a massive stimulus to pump money into the economy
mainly by investing in infrastructure, alternative energy, education and
healthcare.

“We’re working hard and in collaboration with the House
and the Senate. I expect the program will pass within a month,” Summers said. “Some
of the adjustments can take place almost immediately as people see more income
in their paychecks, as state and local governments will get support so that
they can prevent lay-offs of teachers, policemen, other essential personnel.
And there are a ton of shovel-ready projects that are out there that are out
there that are being canceled right now that aren’t going to have to be canceled
when this program passes.”

Despite the incoming administration’s plans, Summers
joined Obama and other officials in pointing out that things would get worse
before they get better. The adviser said Sunday that there is little question
that “the economy is going to decline for some time to come.”

Summers also stated that the Obama administration would
handle the distribution of its half of the $700 billion from the Troubled Asset
Relief Program much different than the government did under President Bush.

“The focus isn’t going to be on the needs of banks. It’s
going to be on the needs of the economy for credit,” he said. “Whether it’s for
housing to prevent foreclosures, whether it’s for automobile loans, consumer
credit, small business, municipalities, the focus is going to be on credit. The
focus will be on transparency.”