Obama: There Is Worse to Come on the Economy; Lots to Do: Obama Introduces His Economic Team to the Press in Chicago. Timothy Geithner, Who Will Be Treasury Secretary, Is on the Far Left and Melody Barnes Is on the Right

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Byline: PAUL THOMPSON

BARACK OBAMA today issued a grim warning to the American people, telling them that the economy was likely to get "worse before it gets better".

The president-elect did not pull his punches in his stark assessment of what lay ahead for the US after he moves into the White House on 20 January, saying the country was facing a crisis of "historic proportions".

Mr Obama said most experts believed that millions of jobs would be lost before the US could turn the corner and shake off the financial crisis.

The downbeat warning came as Mr Obama unveiled his economic "dream team" to help him confront the global economic problems. Wall Street responded favourably with its biggest two-day rally in 21 years. The Dow Jones climbed 396.97 points, or 4.9 per cent, to 8,443.39. The surge was partly in response to the earlier announcement of a $20 billion bail-out of the Citigroup banking group.

Mr Obama unveiled his blueprint for turning around the economy at a press conference in Chicago. As well as a multi-billion-dollar stimulus package, there would also be tax cuts for the "vast majority" of Americans, paid for by the nation's "wealthiest".

He plans to increase taxes for people earning more than $250,000 a year. …