Full transcript of Obama’s speech on the economy in Cleveland, Ohio

(APPLAUSE)

At stake is not simply a choice between two candidates or two political parties, but between two paths for our country. And while there are many things to discuss in this campaign, nothing is more important than an honest debate about where these two paths would lead us.

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Now, that debate has an understanding of where we are and how we got here.

Long before the economic crisis of 2008 the basic bargain at the heart of this country has begun to erode.

For more than a decade, it had become harder to find a job that paid the bills, harder to save, harder to retire, harder to keep up with rising costs of gas and health care and college tuitions.

You know that. You lived it.

(APPLAUSE)

OBAMA: During that decade there was a specific theory in Washington about how to meet this challenge.

We were told that huge tax cuts, especially for the wealthiest Americans, would lead to faster job growth. We were told that fewer regulations, especially for big financial institutions and corporations, would bring about widespread prosperity. We were told that it was OK to put two wars on the nation’s credit card; that tax cuts would create a enough growth to pay for themselves.

That’s what we were told.

So how did this economic theory work out?

(CROSSTALK)

OBAMA: For the wealthiest Americans it worked out pretty well.

Over the last few decades the income of the top 1 percent grew by more than 275 percent, to an average of $1.3 million a year. Big financial institutions, corporations saw their profits soar.

But prosperity never trickled down to the middle class. From 2001 to 2008 we had the slowest job growth in half a century. The typical family saw their incomes halt.

The failure to pay for the tax cuts and the wars took us from record surpluses under President Bill Clinton to record deficits. And it left us unprepared to deal with the retirement of an aging population that’s placing a greater strain on programs like Medicare and Social Security.

OBAMA: Without strong enough regulations, families were enticed and sometimes tricked into buying homes they couldn’t afford. Banks and investors were allowed to package and sell risky mortgages. Huge reckless bets were made with other people’s money on the line. And too many, from Wall Street to Washington, simply looked the other way.

For a while credit cards and home equity loans papered over the reality of this new economy. People borrowed money to keep up.

But the growth that took place during this time period turned out to be a house of cards. And in the fall of 2008 it all came tumbling down with a financial crisis that plunged the world into the worst economic crisis since the Great Depression.

Here in America families’ wealth declined at a rate nearly seven times faster than when the market crashed in 1929. Millions of homes were foreclosed, our deficit soared, and 9 million of our citizens lost their jobs; 9 million hardworking Americans who had met their responsibilities but were forced to pay for the irresponsibility of others.