OBAMA’S ECONOMIC POLICY Since the new government lead by Barack Obama took charge, they were welcomed by the great economic crisis that has recently hit across the globe and jolted few of the world’s most strong economies. Background of the crisis The United States had to face the economic crisis that had not only hit the financial institutions badly but had also affected the real estate as well. The families that had witnessed the decline of their income of $2,000 during the start of the twentieth century to 2007, started to face even greater losses in their income and it became difficult for them to survive in these testing times. The savings account of the retired saw a loss of around $2 trillion and the markets started to sink significantly.
The people who were relying on the mortgage were unable to pay off their current obligations and were forced to face foreclosures as there was a great decline in the worth of real estate. Not only that, the organizations were unable to meet their requirements of payroll as there was a credit crunch and people were unable to generate credit to meet their present obligations.
Barack Obama’s policy to rescue the economy In this time of need and support, the new government did not let go off the sinking ship and extended fullest support to rescue the economy to provide a cushion to the descending economy. Some of the points that were used to refresh and rejuvenate the economy were as follows. Creation of jobs in the United States: The first and foremost step that the government led by Obama took was to make effort in order to create jobs for the people that had become jobless due to the recent crisis and to offer them a suitable source of living.
In this regard, the government took the following steps: Provision of a tax credit in case of hiring of each full time employee amounting to $3,000 Incentive to the small and medium sized businesses for creation of job opportunities Elimination of the capital gain taxes on start-up of small size business which create opportunities for jobs Aid and assistance for struggling folks: President Obama has a very important and immediate measure where they can provide support to the families that are driven by extreme poverty and are struggling.
He made the following measures to provide aid and assistance to them: A $500 and $1,000 tax cut was awarded to the workers and the families respectively Strengthening the unemployment insurance and take additional measures such as tax cut for the benefits arising out of unemployment insurance in order to provide immediate assistance to the families Special cushion in form of reduction in prices for place that have to counter extreme cold in the winter season and require a great amount of fuel to cope up with their energy needs Aid for the homeowners: The United States government, especially Barack Obama and Joe Biden, formulated especial policy for the homeowners who were struck by the decline in the real estate prices and formulated a policy for those who required aid in the process of restructuring of their mortgages as the real estate value fell below the mortgage cost of their homes.
The policy contained the following: Modification of the terms of the mortgages of the real estate so that the homeowners don’t suffer heavily loss due to the decline For the homeowners who are acting in good faith, be awarded an enactment of 90-day foreclosure suspension. A $25 billion relief in form of fiscal relief in order to help the avoidance of increment in the property taxes and the creation of tax credit for the homeowners which will amount to 10% refundable tax credit Responding the crisis: The government of US is taking steps to make the financial institutions start lending money so that the financial markets start responding and in order to get the financial institutions to start lending, the government is taking steps to inject further capital into the financial sector.
For this purpose, Obama is providing aid in form of urgent lending and elimination of fees on loan guarantees etc. REFERENCES Change (2010) Retrieved from http: //change. gov/agenda/economy_agenda/