Obama’s Mortgage Plan Marks Next Step in Recovery Effort

GWEN IFILL:

Larry Summers, welcome. President Obama has said the best way to tackle this economy is that there are three stools to it. It looks like today there are four: housing, economic stimulus, banking, and the auto industry bailout. Which is the most important of those four?

LARRY SUMMERS, White House economic adviser: You know, a table doesn't stand without all four of its legs, and that's the way it is with supporting the economy.

Each of these pieces is going to be very important. The overall economic recovery act that the president signed into law yesterday, which is going to create 3 million jobs, that's going to inject demand into the economy and people are going to be able to pay their bills. That's in turn going to help the financial system, which will mean more credit, which will help the economy further.

Both of those things should come together to support housing. And if we can support housing and avoid foreclosures, that will reinforce all of that. And, obviously, it's going to be much easier to help the automobile industry in a context of an economy that's working.

You know, if you look at aggregate automobile sales, they haven't been this low in decades, and that speaks to the importance of getting the economy going. At the same time, automobiles are a critical sector, a critical part of our manufacturing economy, and so supporting the automobiles industry will help the overall economy.

So, look, it's not a simple thing. These problems weren't made in a month or a year. They're not going to get fixed in a month or a year, and there isn't going to be any single silver bullet.

But I think what's important about the president's approach is that we are moving rapidly. He's been president less than a month. We've seen the economic recovery act. We've seen the financial recovery plan. We've seen housing. We're beginning a process of working on the automobile sector. He's engaging with the global economy, as we look to the G-20 economy.

It's a comprehensive approach. It's going to be a bold approach, because, as the president has said, there's more risk from doing too little than there is from doing too much. And it's going to be an active approach where, as conditions warrant, as things change, we will adjust our strategy, but always be leaning forward, trying to push the economy forward, because, frankly, that's what a situation as serious as this one demands.