'Our economy is very sick and we must act now'

BARACK Obama is to deliver a major speech on the economy to the American people as he attempts to rush through a £500 billion stimulus package.

The president-elect will use the speech to outline how he plans to distribute the money to kick-start the US economy, which he described as "very sick".

After meeting Democratic and Republican congressional leaders on his first working day in Washington yesterday he said he hoped the money would start flowing by the end of the month.

Mr Obama has made it clear he wants quick approval from Congress for the rescue package, admitting that the US economy was "bad going to worse". With more than two million job losses reported for the first 11 months of last year, a report at the end of the week is predicted to show further losses of 500,000.

He is due to deliver his speech on the economy on Thursday. He did not attempt to play down the problems the country is facing. "The economy is bad. The situation is getting worse," he said. "It's clear that we have to act now."

Mr Obama, who has less than two weeks until his inauguration, plans tax cuts of up to £200 billion. Individual tax payers could see a rebate of £330 while couples would get double that amount.

Small businesses would get a £66billion tax cut with federal spending to push the final amount to £500billion.

Mr Obama is anxious not to face the delays suffered by the Bush administration over its £530 billion bank bail-out.

"This is not a Republican problem or a Democratic problem. This is an American problem," he said.