(CNSNews.com) - In a speech delivered at Osawatomie High School in Osawatomie, Kansas, on Tuesday, President Barack Obama argued that while a limited government that preserves free markets "speaks to our rugged individualism" as Americans, such a system "doesn't work" and "has never worked" and that Americans must look to a more activist government that taxes more, spends more and regulates more if they want to preserve the middle class.
"'[T]here is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune. 'The market will take care of everything,' they tell us," said Obama. "If we just cut more regulations and cut more taxes--especially for the wealthy--our economy will grow stronger.
"Sure, they say, there will be winners and losers," Obama continued. "But if the winners do really well, then jobs and prosperity will eventually trickle down to everybody else. And, they argue, even if prosperity doesn’t trickle down, well, that’s the price of liberty.
"Now, it’s a simple theory," said Obama. "And we have to admit, it’s one that speaks to our rugged individualism and our healthy skepticism of too much government. That’s in America’s DNA. And that theory fits well on a bumper sticker. But here’s the problem: It doesn’t work. It has never worked.
"It didn’t work when it was tried in the decade before the Great Depression," said Obama. "It’s not what led to the incredible postwar booms of the ‘50s and ‘60s. And it didn’t work when we tried it during the last decade. I mean, understand, it’s not as if we haven’t tried this theory.
"Remember in those years, in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history," said Obama. "And what did it get us? The slowest job growth in half a century. Massive deficits that have made it much harder to pay for the investments that built this country and provided the basic security that helped millions of Americans reach and stay in the middle class==things like education and infrastructure, science and technology, Medicare and Social Security.
"Remember that in those same years, thanks to some of the same folks who are now running Congress, we had weak regulation, we had little oversight, and what did it get us?" said Obama. "Insurance companies that jacked up people’s premiums with impunity and denied care to patients who were sick, mortgage lenders that tricked families into buying homes they couldn’t afford, a financial sector where irresponsibility and lack of basic oversight nearly destroyed our entire economy.
"We simply cannot return to this brand of 'you’re on your own' economics if we’re serious about rebuilding the middle class in this country," said Obama.
To read the full speech as transcribed by the White House click here.