    [Public Papers of the Presidents of the United States: George W. Bush (2008, Book II)]
    [October 10, 2008]
    [Pages 1294-1296]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on the National Economy
    October 10, 2008

        Good morning. Over the past few days, we have witnessed a startling
    drop in the stock market, much of it driven by uncertainty and fear.
    This has been a deeply unsettling period for the American people. Many
    of our citizens have serious concerns about their retirement accounts,
    their investments, and their economic well-being.
        Here's what the American people need to know: that the United States
    Government is acting; we will continue to act to resolve this crisis and
    restore stability to our markets. We are a prosperous nation with
    immense resources and a wide range of tools at our disposal. We're using
    these tools aggressively.
        The fundamental problem is this: As the housing market has declined,
    banks holding assets related to home mortgages have suffered serious
    losses. As a result of these losses, many banks lack the capital or the
    confidence in each other to make new loans. In turn, our system of
    credit has frozen, which is keeping American businesses from financing
    their daily transactions and creating uncertainty throughout our
    economy.
        This uncertainty has led to anxiety among our people, and that is
    understandable. That anxiety can feed anxiety, and that can make it hard
    to see all that is being done to solve the problem. The Federal
    Government has a comprehensive strategy and the tools necessary to
    address the challenges in our economy. Fellow citizens, we can solve
    this crisis, and we will.
        Here are the problems we face and the steps we are taking.
        First, key markets are not functioning because there's a lack of
    liquidity, the grease necessary to keep the gears of our financial
    system turning. So the Federal Reserve has

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    injected hundreds of billions of dollars into the system. The Fed has
    joined with central banks around the world to coordinate a cut in
    interest rates. This rate cut will allow banks to borrow money more
    affordably, and it should help free up additional credit necessary to
    create jobs and finance college educations and help American families
    meet their daily needs. The Fed has also announced a new program to
    provide support for the commercial paper market, which is freezing up.
    As the new program kicks in over the next week or so, it will help
    revive a key source of short-term financing for American businesses and
    financial institutions.
        Second, some Americans are concerned about whether their money is
    safe. So the Federal Deposit Insurance Corporation and the National
    Credit Union Administration have significantly expanded the amount of
    money insured in savings accounts and checking accounts and certificates
    of deposit. That means that if you have up to $250,000 in one of these
    insured accounts, every penny of that money is safe. The Treasury
    Department has also acted to restore confidence in a key element of
    America's financial system by offering Government insurance for money
    market mutual funds.
        Thirdly, we are concerned that some investors could take advantage
    of the crisis to illegally manipulate the stock market. So the
    Securities and Exchange Commission has launched rigorous enforcement
    actions to detect fraud and manipulation in the market. The SEC is
    focused on preventing abusive practices, such as putting out false
    information to drive down particular stocks for personal gain. Anyone
    caught engaging in illegal financial activities will be prosecuted.
        Fourth, the decline in the housing market has left many Americans
    struggling to meet their mortgages--and are concerned about losing their
    homes. My administration has launched two initiatives to help
    responsible borrowers keep their homes. One is called HOPE NOW, and it
    brings together homeowners and lenders and mortgage servicers and others
    to find ways to prevent foreclosure. The other initiative is aimed at
    making it easier for responsible homeowners to refinance into affordable
    mortgages insured by the Federal Housing Administration. So far, these
    programs have helped more than 2 million Americans stay in their home.
    And the point is this: If you are struggling to meet your mortgage,
    there are ways that you can get help.
        With these actions to help to prevent foreclosures, we're addressing
    a key problem in the housing market: The supply of homes now exceeds
    demand. And as a result, home values have declined. Once supply and
    demand balance out, our housing market will be able to recover, and that
    will help our broader economy begin to grow.
        Fifth, we've seen that problems in the financial system are not
    isolated to the United States. They're also affecting other nations
    around the globe. So we're working closely with partners around the
    world to ensure that our actions are coordinated and effective. Tomorrow
    I'll meet with the finance ministers from our partners in the G-7 and
    the heads of the International Monetary Fund and World Bank. Secretary
    Paulson will also meet with finance
    ministers from the world's 20 leading economies. Through these efforts,
    the world is sending an unmistakable signal: We're in this together, and
    we'll come through this together.
        And finally, American businesses and consumers are struggling to
    obtain credit because banks do not have sufficient capital to make
    loans. So my administration worked with Congress to quickly pass a $700
    billion financial rescue package. This new law authorizes the Treasury
    Department to use a variety of measures to help bank rebuild capital,
    including buying or insuring troubled assets and purchasing equity of
    financial institutions. The Department will implement measures that have

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    maximum impact as quickly as possible. Seven hundred billion dollars is
    a significant amount of money. And as we act, we will do so in a way
    that is effective.
        The plan we are executing is aggressive. It is the right plan. It
    will take time to have its full impact. It is flexible enough to adapt
    as the situation changes, and it is big enough to work.
        The Federal Government will continue to take the actions necessary
    to restore stability to our financial markets and growth to our economy.
    We have an outstanding economic team carrying out this effort, led by
    Secretary of the Treasury Hank Paulson, Federal Reserve Chairman Ben Bernanke, SEC Chairman Chris Cox, and
    FDIC Chair Sheila Bair. I thank them and
    their dedicated teams for their service during this important moment in
    our country's history.
        This is an anxious time, but the American people can be confident in
    our economic future. We know what the problems are, we have the tools to
    fix them, and we're working swiftly to do so. Our economy is innovative,
    industrious, and resilient because the American people who make up our
    economy are innovative, industrious, and resilient. We all share a
    determination to solve this problem, and that is exactly what we're
    going to do. May God bless you.

    Note: The President spoke at 10:25 a.m. in the Rose Garden at the White
    House. The Office of the Press Secretary also released a Spanish
    language transcript of these remarks.