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Investors ignored him, as anxiety triumphed on the first trading day after the Standard & Poor's downgrade of American debt.

The
Dow Jones industrials closed down 634 points, or 5.5 per cent, to
10,809. It was the first time the Dow fell below 11,000 since November -
the biggest one-day point drop since December 2008 and the sixth
biggest fall ever.

The broader S&P 500 lost 5.7 per cent,
while the tech-heavy Nasdaq Composite plunged 5.6 per cent, on a day of
market turmoil around the world sparked by US debt fears and wider
concern about Europe's debt crisis.

Speaking against a backdrop
of tumbling global stock markets, Obama said he would present his own
solutions for mending US debt woes in "coming weeks" but again called on
Republicans to accept tax hikes on the richest Americans.

The
president was making his first public comments on the historic decision
by ratings agency Standard & Poor's on Friday to downgrade the AAA
credit rating on US sovereign debt for the first time to AA+ with a
negative outlook.

"No matter what some agency may say, we have
always been and always will be a triple-A country," Obama said, arguing
global investors still saw the US economy as one of the safest
investments in the world.

But he conceded that fiercely partisan
combat in Washington was hampering efforts to fix the US economy, and
called on all sides to unite on a balanced solution to ease the deficit
tipped to hit 1.6 trillion dollars this year.

"Here's the good
news. Our problems are eminently solvable. And we know what we have to
do to solve them," Obama said at the White House.

The president
said the solution to US deficit woes was a mixture of tax rises on the
most affluent Americans and modest cuts to state-run health programmes
plagued by rising costs, like Medicare for the elderly.

"Making these reforms doesn't require any radical steps. What it does require is common sense and compromise," Obama said.

The
formula was a failed part of an Obama push for a "grand bargain" during
the fierce debate over raising the US government's borrowing authority
which wrapped up last week.

Republicans refuse to countenance any
kind of tax rises and Obama's Democratic allies have balked at any cuts
to Medicare or other aspects of the American social safety net.

"It's
not a lack of plans or policies that is the problem here. It's a lack
of political will in Washington," Obama said, billing a congressional
committee set up under the debt ceiling deal as a way out of the crisis.

"It's
the insistence on drawing lines in the sand, a refusal to put what's
best for the country ahead of self-interest or party of ideology. And
that's what we need to change."

But within minutes of Obama's
speech, covered by television news networks alongside a split screen
showing the Dow Jones Industrial Average plunging by hundreds of points,
Republicans reaffirmed their positions.

Mitch McConnell, the top
Republican in the Senate, said he disagreed with Obama's call for "tax
hikes on American families and job creators."

But McConnell said
he did believe the congressional committee "can and should focus on
entitlement reform, an area where the president has already said he is
willing to support significant savings."