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America still has greatest economic potential: Obama

india Updated: Aug 12, 2011 11:41 IST

US President Barack Obama on Friday said that despite the downgrade of US credit worthiness, investors are still pumping money into US treasuries, indicating that America still has the "greatest economic potential".

Touting America as the safest investment in the world, Obama said, "And the debt-- I don't know if you have noticed, but when the stock market went down, what did everybody buy after the downgrade? US treasuries."

He added that despite the gloom of the market crash and US credit rating downgrade by Standard & Poor's, "everybody understands that the United States still has the greatest economic potential, greatest businesses and the greatest workers on Earth."

"And so the market voted with its feet in terms of its confidence in the marketplace," he said.

Further, he said with "modest adjustments" to the country's tax code and medical programmes like Medicare and Medicaid, "this problem would vanish. We could solve it."

The Dow Jones industrial average had tanked over 600 points on the week's first day of trading in response to S&P's unprecedented move to downgrade US rating from the top notch 'AAA' to 'AA+'.

In an ironic move, anxious investors poured money into Treasury securities, which are the debt the government sells to finance its operations. Investors had deemed treasuries to be safer than any other investment during an atmosphere of economic uncertainty.

Obama noted that the last couple of months have been "frustrating," referring to the debt crisis that had plagued Washington, which reached a "low water mark".

He said people outside Washington understand that the country is going through a fundamental change because of globalisation and are working towards being more competitive and giving a better education to their kids.

But when they "look at what is happening in Washington... they think, these folks are really from outer space, because they do not seem to understand how critical it is for us all to work together -- Republicans, Democrats, independents -- in order to move this country forward."

"What was remarkable was to see outside of Washington, the enthusiasm, the energy, the hopefulness, the decency of the American people," Obama said.

He added that if this energy is harnessed and tapped, "then I am absolutely convinced that this country is going to be on the upswing over the next few years... We can put people back to work and we can get this economy growing again."

Mending the "broken" system is what makes the 2012 election "more important" than the one in 2008, he added.

The President was in New York to attend a star-studded private fund raising event as part of his 2012 re-election campaign.

The top dollar fundraiser, had the 50 attendees, including movie star Gwyneth Paltrow, fashion magazine Vogue editor Anna Wintour and artist Alicia Keys, paying over $35,000 to spend the evening with the President.