|Source:Associated Press- President Barack H. Obama (Democrat, Illinois) speaking about the economy in Las Vegas.|
"President Barack Obama offered mortgage relief on Monday to hundreds of thousands of Americans, his latest attempt to ease the economic and political fallout of a housing crisis that has bedeviled him as he seeks a second term. (Oct. 24)"
From the Associated Press
The two main problems with our economy right now are our housing market and the lack of consumer spending and they relate, because people who are underwater in debt right now, as a result of the housing market and the lack of value of their homes. As well as credit card debt they may have piled up because they were out-of-work or took a steep pay cut, aren't spending money right now because they are drowning in debt right now or they owe more on their home then its worth or both factors.
So to get the economy going again, we have to retire a lot of our consumer debt, get that debt going again so people have money to spend, which would lead to economic growth and then job growth. Which would lower our unemployment rate and also allow us to start paying down our national debt and deficit. Because we would then have the resources to do so. I believe President Obama understands that.
Tax cuts like payroll tax holidays and others are good as well, but if you have a high debt burden or you owe more on your mortgage then you can afford to pay back or you are unemployed, you are going to use whatever extra revenue you may get to pay down your debt or if your worried about losing your job, your are going to use whatever extra money you may have and put that money in your savings in case your laid off.
We have a lot of issues with our economy right now, with our lack of infrastructure investment the need for a national energy policy, education reform, and are crumbling schools being part of that. Our huge debt and deficit, the need for more foreign trade so we can sell more products made by Americans in America creating more Americans jobs, as well as the need for tax reform. But none of those things mean anything if people don't start spending money again.
The middle class where most of the country lives, but for them to be able to spend money they need to be out of debt or at least not drowning in debt by having a manageable debt. And whatever economic package that Congress may or may not pass needs to include debt relief for consumers to get a lot of our consumer debt retired, so the people have the money to start spending again buying things that they've been putting off. So we can create more consumer demand in the economy right now. So business's feel the need to hire additional workers to meet the new consumer demand for their business.
There just isn't enough Consumer Demand in our economy right now to create enough Economic Growth to lead to Job Growth. That would bring down our Unemployment Rate. And allow us to start paying down our Federal Debt and Deficit and a way to do that. Is to start retiring our Consumer Debt which would help lead to stronger Consumer Spending and Economic Growth.