Transcripts

President Obama Calls on the World to Win The Economic War

SUSIE GHARIB: President Obama said today fighting the recession requires global action. He's asking countries with the world's largest economies to support a big stimulus program and to commit almost half a trillion dollars to an emergency fund for the global financial system. The money would be managed by the International Monetary Fund, with as much as $90 billion coming from the United States. Darren Gersh reports.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Meeting with his Treasury secretary today, the president said it was not enough to support our own economy. We need to help the global economy as well.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We can do a really good job here at home with a whole host of policies, but if you continue to see deterioration in the world economy, that's going to set us back.

GERSH: The president said strong exports had, until very recently, helped support the U.S. economy. Now even China is having trouble exporting, with shipments down 26 percent last month, which is why, at a meeting this weekend, the U.S. will press finance ministers from the world's largest economies to launch stimulus packages amounting to 2 percent of their GDP. Treasury Secretary Timothy Geithner is calling for immediate action.

TIMOTHY GEITHNER, TREASURY SECRETARY: We need to bring the world together to put in place a very substantial, sustained program of support for recovery and growth. And we want to bring together a new consensus globally on how to strengthen this global financial system so a crisis like this never happens again.

GERSH: Tops on Geithner's agenda, a call for other big countries to join the U.S. in giving the International Monetary Fund an additional $450 billion in emergency lending power. Brookings Institution economist Eswar Prasad says a beefed up IMF would help very poor countries now facing default. But he says larger countries like India simply need the world's biggest customer, the United States, to recover as quickly as possible.

ESWAR PRASAD, SR. FELLOW, BROOKINGS: Ultimately, what is good for the emerging markets and other developing countries is if the U.S., the European Union, Japan and the other big industrial countries, if their financial systems are stable and if their economies are growing at a stable rate. That is the best way, in fact that you can help these emerging markets.

GERSH: The other way to help, says economist Morris Goldstein, is to make sure countries don't play protectionist games with their stimulus plans.

MORRIS GOLDSTEIN, SR. FELLOW, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: Everybody thinks they are going to get a bigger share by saying, well, when we have our stimulus package, we'll only buy local goods. Or they tell their banks, we're in a credit crunch, so you should give first priority to domestic customers.

GERSH: Raising funds for the IMF will not be an easy sell on Capitol Hill, but the Obama administration believes a deepening global recession will focus attention both here and abroad. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.