Last night, in his first address to a joint session of Congress, President Barack Obama sought to instill a sense of confidence that the United States will fully recover from the recession, with the government playing the lead role.

"We will build, we will recover, and the United States of America will emerge stronger than before," Obama said.

Having last week signed a $787 billion economic stimulus plan into law, Obama last night offered a number of proposals that focused on four areas in particular: energy, health care, education and reducing debt.

Obama sought to provide some details on what he plans for the economy, even as his administration's plans for reducing foreclosures and restoring credit have been criticized for being too vague. Obama is expected to release his budget outline tomorrow.

Soon after signing the economic stimulus package, the White House announced a $275 billion plan to prevent foreclosures. The plan includes $75 billion from the bank bailout fund to help 9 million "at risk" homeowners modify their mortgages.

"The recovery plan and the financial stability plan are the immediate steps we're taking to revive our economy in the short-term," Obama said in last night's address. "But the only way to fully restore America's economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world."

"The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren't preparing our children and the mountain of debt they stand to inherit," the president continued.

Obama also highlighted hope in the midst of hardships past presidents have faced: "We are not quitters," he proclaimed. "The answers to our problems don't lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth."

The president also associated himself with those exasperated with Wall Street titans and irresponsible homebuyers, calling for stricter regulatory reforms of the nation's financial institutions. He, too, is angry, he said.

Executives padding paychecks with taxpayer money? "Those days are over," he said.

Helping bankers who got everyone into this mess? "I promise you, I get it," he said.

"We cannot afford to govern out of anger or yield to the politics of the moment," he argued.

At the same time, the president has pledged to cut the deficit at least in half by the end of his first term, saying his administration had "already identified $2 trillion in savings over the next decade."

President Obama's speech — a State of the Union address in everything but name — followed comments this week from Federal Reserve Chairman Ben Bernanke, who predicted that the U.S. economy could begin to recover in 2010 if global governments work together to fix the financial crisis.

In congressional testimony, Bernanke depicted an economy undergoing a "severe contraction." Nonetheless, Bernanke said the recession could end in 2009, paving the way for a "year of recovery" in 2010.

Any economic recovery next year could be weak, the Fed chairman and a number of other economists and analysts note, probably with continued high unemployment.

The economy faces major risks from a deepening global recession and a reinforcing cycle of economic weakness and financial frailty. The biggest banks in the country appear to be on the edge of collapse. The markets have been plunging. Consumer confidence has fallen to record lows. According to Bernanke, no recovery is likely before 2010.

The Manufacturers Alliance/MAPI's latest forecast supports the Fed chief's prediction.

"The U.S. economy continues to decline, and any recovery promises to be long and arduous. Yet, assuming businesses and consumers find a way through the painful beginning of 2009, there is potential for improvement in late 2009 and into 2010," according to the Manufacturers Alliance/MAPI's Quarterly Economic Forecast, released a week ago.

Bernanke made clear that any turnaround would depend on whether government efforts succeed in stabilizing the financial markets.

Said Obama, "My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we've inherited — a trillion-dollar budget deficit, a financial crisis and a costly recession. Given these realities, everyone in this chamber, Democrats and Republicans, will have to sacrifice some worthy priorities for which there are no dollars. And that includes me."

While two recent annual rankings place the U.S. as the No. 1 nation in terms of international competitiveness, a new study from the Information Technology and Innovation Foundation has found that the U.S. ranked sixth among 40 countries and regions — and dead last in terms of progress made over the last decade. The study also included specific recommendations, such as federal incentives for American companies to innovate.

Resources

Remarks of President Barack Obama - Address to Joint Session of Congress
WhiteHouse.gov, Feb. 24, 2009

Ben S. Bernanke: Semiannual Monetary Policy Report to the Congress
Board of Governors of the Federal Reserve System, Feb. 24, 2009

MAPI Quarterly Economic Forecast: Recession Takes Hold
The Manufacturers Alliance/MAPI, Feb. 18, 2009