NEW YORK/LONDON—President-elect Barack Obama said on Saturday he was crafting a two-year plan to fight an economic crisis of "historic proportions."
In another sober assessment, billionaire investor George Soros said the U.S. economy needed an additional $300 billion to $600 billion in support funds to help it withstand a financial crisis which he said "has exceeded my most daring expectations.
The corporate scenario also darkened, with U.S. automaker General Motors Corp considering "all options," including bankruptcy, because of its liquidity problems, according to the Wall Street Journal.
And banker Citigroup Inc was in talks with the U.S. government amid doubts about its ability to survive.
President George W. Bush, on the last overseas trip of his presidency, urged other leaders at a summit in Lima, Peru, not to let the global financial crisis push the world away from free trade.
Obama, who takes over from Bush on January 20, said, "There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better.
He was speaking in a radio address on Saturday, the day after reports that he had chosen the New York Federal Reserve president, Timothy Geithner, as Treasury secretary rallied stock markets.
Obama, a Democrat, said swift and bold action was needed to prevent a deep slump, a spiral of falling prices, and millions of job losses.
He signaled he was prepared to push for a much larger package than the $175 billion stimulus measure he called for in his election campaign. His plan would set a goal of creating 2.5 million more jobs by January 2011—a two-year scenario.
"The news this week has only reinforced the fact that we are facing an economic crisis of historic proportions," Obama said.
Soros, one of the world's first and best-known hedge fund managers, told Germany's Der Spiegel magazine the United States needed an infrastructure program and a large economic stimulus package to provide its cities and states with sufficient cash.
The U.S. government has launched a $700 billion financial bailout initiative in response to the turmoil. But the U.S. economy needed additional support measures of between $300 billion and $600 billion, Soros said.
He criticized U.S. Treasury Secretary Henry Paulson for having reacted too late to the crisis but said he had high hopes about Obama's ability to manage the situation.
"The duration of the crisis depends on the success of his policies," Soros said, according to Der Spiegel.
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In Germany, Chancellor Angela Merkel said she expected the first few months of next year to bear more bad news for Europe's largest economy, which is now in recession.
Merkel told Welt am Sonntag newspaper that economic development in Germany, Europe and the rest of the world was hard to predict but "we have to expect the coming year, at least in the first months, to be a year of bad news."
The Wall Street Journal said General Motors was considering "all options" because of its liquidity problems. A GM spokesman told the paper that management was doing everything it could to avoid a bankruptcy filing.
Chief Executive Rick Wagoner, along with bosses from Ford Motor Co, and Chrysler, went to Capitol Hill this week to plea for $25 billion to bail out the auto industry.
Citigroup executives, meanwhile, met Federal Reserve and U.S. Treasury Department officials in recent days to discuss its options, which include another capital injection from the Treasury, a person familiar with the matter said.
The bank's management has also discussed selling off units or finding another bank to merge with.
"It's fear and panic at this point," said Gerard Cassidy, a banking analyst at RBC Capital Markets in Portland, Maine.
"Investors have seen similar movies this year, and the endings are very unpleasant."
