Clock's Ticking on Obama's Stimulus as Unemployment 'Ticks Up'

This is a rush transcript from "On the Record," July 14, 2009. This copy may not be in its final form and may be updated.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This has been a more severe recession than we've seen since the Great Depression. So how employment numbers are going to respond is not yet clear. My expectation is, is that we will probably continue to see unemployment tick up for several months.


GRETA VAN SUSTEREN, FOX NEWS HOST: Ouch! "Tick up?" As you just heard, President Obama says unemployment is going to get worse. He admits it will rise, tick up, in the next few months. Unemployment stands at 9.5 percent right now, the highest it has been in 25 years. The president and economists say that unemployment usually lags behind other signs of an improving economy, but when is the president's stimulus package supposed to kick in? How long can jobless Americans wait?

Joining us is live is David Weidner from Marketwatch. David, why do you think the president is now saying that it's going to tick up? I mean, before, he gave us much -- he gave us a better -- he thought it was going to be much lower than 9.5. It's worse.

DAVID WEIDNER, MARKETWATCH: Right. Well, I mean, the president has been slow to catch on, I think, even what his own economic advisers have been talking about, and what -- and the numbers that the government is actually using as it looks forward and tries to plan for what's coming ahead. So he's a little behind. Most of the economists, most of the people in the government have been talking about higher unemployment numbers. In fact, the Treasury, which did these stress tests on the banks, used numbers ranging between 10 and 12 percent. So the president is catching on, and when he says it, I guess that makes it official.

VAN SUSTEREN: You know, David, you know, the -- unemployment is a lagging indicator. I mean, it's going to be the last thing to sort of -- you know, to move in the right direction. You know, I'll give that to him. But at what point should we expect -- I mean, what are the indicators that stimulus is working, if it's not unemployment? And when should we begin to see those numbers moving in a positive way before we reach the conclusion whether the stimulus package is working or not?

WEIDNER: Right. Well, a couple things, Greta. First of all, there have been problems with the stimulus package, and I think even the administration would admit that the money is not getting out there as fast as they had hoped, and so it's not having the intended effect.

The second thing is that the stimulus was sold as kind of the kick- start to the economy to get it moving again, getting moving in positive territory. The reality is, is that it's more of a buffer against the down side, and we can't expect all of a sudden GDP to start rushing forward with 2, 3, 4, 5 percent growth rates because of the stimulus. That's not how it's going to work.

Now, that being said, the Congressional Budget Office estimated that maybe the stimulus will kick in in the fall of 2009. I think with some of the delays that the government's been talking about in terms of getting the money out there, it may not have the effect maybe until year-end.

VAN SUSTEREN: What -- what do you -- but when it was passed, though, everyone was told that there were shovel-ready projects, and only about 10 percent of the $800 billion has now, you know, been disbursed. Is it that they're just not doing it right, they're not getting the money out there, that they're inefficient, or is it a bad idea?

WEIDNER: You know, I don't know. I think there's so many moving parts or so many different parts of the stimulus package that it's difficult to say. I know that with the highways, the states are just sitting there, waiting. So I don't know all the ins and outs. I just -- I do know that the government does acknowledge that it's not getting out there.

VAN SUSTEREN: David, thank you.

WEIDNER: All right. Thanks, Greta.

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