Obama's $75 billion mortgage relief
Yes, that is 75 billion dollars to try to save the nation's housing crisis, according to a report by Associated Press writers Mark S. Smith and Alan Zibel, through Yahoo! News. The relief program will attempt to prevent up to 9 million Americans from losing their homes to foreclosure.
Now, I really don't know where we get all this money. The article says that we are, loosely quoted, doubling our lifeline to Freddie Mac and Fannie Mae, two companies that the government took over last year. The article says that each company could take up to $200 billion in losses.
I realize that this, and the $787 billion stimulus bill as a whole, is a lot of federal government spending, but, while I don't understand what the whole bill is trying to do, I support it. Call me crazy, but I support Obama and think that he is doing what we need to improve our country and its decreasing economy.
As the article says, the money for the mortgage crisis is aimed at those that owe more on their mortgage than their house is actually worth. I do think this is a problem in this country. Too many foreclosures, too many people taking loans that they cannot afford or cannot pay off in the near future. The interest involved escalates the price of the mortgage, and that can eventually surpass the actual value of the house. At that point, even if a person can afford payments, they may leave, recognizing that their property is not a sound investment. While this will inevitably result in a huge credit hit, people are willing to take that risk in this economy.
I think this country is on the verge of a second Great Depression, and I think the President is doing everything in the power to reverse this fortune. His stimulus bill looks a lot like some of the Great Society programs enacted during the Lyndon Johnson administration. One of the goals of the Great Society was to help reduce poverty, exactly what Obama is trying to accomplish. Some longstanding results of the Great Society include Medicare and Medicaid and the Peace Corps.
Now I realize that this has gotten off topic. I initially aimed to talk about the house foreclosure crisis and the money that Obama is going to spend to try to combat the problem. However, when you mention that money, you need to talk about the stimulus bill, and that in turn brings back memories of what Johnson accomplished. It's too early to tell if this bill will work, if the $75 billion will be spent appropriately and have any effect at all in stopping the housing crisis. But it sounds like the Commander-in-Chief is doing everything he can to try to fix the country and what more can we ask for?
Now, I really don't know where we get all this money. The article says that we are, loosely quoted, doubling our lifeline to Freddie Mac and Fannie Mae, two companies that the government took over last year. The article says that each company could take up to $200 billion in losses.
I realize that this, and the $787 billion stimulus bill as a whole, is a lot of federal government spending, but, while I don't understand what the whole bill is trying to do, I support it. Call me crazy, but I support Obama and think that he is doing what we need to improve our country and its decreasing economy.
As the article says, the money for the mortgage crisis is aimed at those that owe more on their mortgage than their house is actually worth. I do think this is a problem in this country. Too many foreclosures, too many people taking loans that they cannot afford or cannot pay off in the near future. The interest involved escalates the price of the mortgage, and that can eventually surpass the actual value of the house. At that point, even if a person can afford payments, they may leave, recognizing that their property is not a sound investment. While this will inevitably result in a huge credit hit, people are willing to take that risk in this economy.
I think this country is on the verge of a second Great Depression, and I think the President is doing everything in the power to reverse this fortune. His stimulus bill looks a lot like some of the Great Society programs enacted during the Lyndon Johnson administration. One of the goals of the Great Society was to help reduce poverty, exactly what Obama is trying to accomplish. Some longstanding results of the Great Society include Medicare and Medicaid and the Peace Corps.
Now I realize that this has gotten off topic. I initially aimed to talk about the house foreclosure crisis and the money that Obama is going to spend to try to combat the problem. However, when you mention that money, you need to talk about the stimulus bill, and that in turn brings back memories of what Johnson accomplished. It's too early to tell if this bill will work, if the $75 billion will be spent appropriately and have any effect at all in stopping the housing crisis. But it sounds like the Commander-in-Chief is doing everything he can to try to fix the country and what more can we ask for?
Detroit Auto Industry Wants More Cash
A column on nyt.com by New York Times reporters Bill Vlasic and Nick Bunkley describes how two out of the three Detroit auto companies, GM and Chrysler, want more money to help prevent the companies from bankruptcy. The companies have already received $25 billion in federal aid, but claim that they need another $14 billion to remain afloat. In return, the companies say that they will make an effort to stay in business by cutting jobs and closing factories. General Motors, for example, said it would lay off 47,000 of its 244,000 workers worldwide and close down 5 of its 38 North American manufacturing plants, and close an additional 9 plants by 2012. GM is also requesting a reduction of its debt to bondholders from $27 billion to $9 billion. General Motors claims that this plan could help them break even by 2010 and start paying their debts by 2012.
Maybe these companies should start being more like Ford Motor Vehicles. Ford has not asked the government for any assistance, unlike GM and Chrysler, who are complaining that the money they are getting is not enough. They are, essentially, trying to blackmail the government into getting more aid, claiming that it would cost the government more if the companies file for bankruptcy protection. Oh, and if the government gives them aid, they will show their appreciate by cutting, in GM's case, 47,000 jobs. 47,000! I realize that that is a number for the worldwide workforce, but how many of those jobs lost will be American jobs? Why should we give them money so that more Americans can be unemployed?
Then, they want a substantial debt reduction, that would cut the money they owe by two-thirds, so that they can start paying it off in three years. So, yeah, let's give these companies money so they can lay off workers and then wait three years to start paying what they owe. It makes no sense. There's a good possibility that they will get this aid, which will not help the American economy out at all, and will just satisfy the auto industries until they need more money, at which they will make the same arguments that they are making now. Look at all the small corporations and mom-and-pop businesses that could use federal aid, that could remain solvent and add additional jobs instead of taking them away. What do these big auto industries have over the nation's small companies? My suggestion to the federal government: Ignore the auto industry's request.
Maybe these companies should start being more like Ford Motor Vehicles. Ford has not asked the government for any assistance, unlike GM and Chrysler, who are complaining that the money they are getting is not enough. They are, essentially, trying to blackmail the government into getting more aid, claiming that it would cost the government more if the companies file for bankruptcy protection. Oh, and if the government gives them aid, they will show their appreciate by cutting, in GM's case, 47,000 jobs. 47,000! I realize that that is a number for the worldwide workforce, but how many of those jobs lost will be American jobs? Why should we give them money so that more Americans can be unemployed?
Then, they want a substantial debt reduction, that would cut the money they owe by two-thirds, so that they can start paying it off in three years. So, yeah, let's give these companies money so they can lay off workers and then wait three years to start paying what they owe. It makes no sense. There's a good possibility that they will get this aid, which will not help the American economy out at all, and will just satisfy the auto industries until they need more money, at which they will make the same arguments that they are making now. Look at all the small corporations and mom-and-pop businesses that could use federal aid, that could remain solvent and add additional jobs instead of taking them away. What do these big auto industries have over the nation's small companies? My suggestion to the federal government: Ignore the auto industry's request.
Where the Stimulus Money Will Go
CNN.com has an interesting pie chart that lets people know where exactly the money from the stimulus bill that Obama signed into law will go. The chart does not include tax provisions, and only shows where the spending allotment of $317.2 billion.
The biggest slice of the pie, pun intended, is the more than $98 billion aimed at energy solutions and our nation's environment. This is very important when alternative fuels can be produced, the energy part of this section, to save Americans money and, in turn, help the environment by reducing the dangerous emissions of CO2 and reducing the amount of fossil fuels that we use. This sounds reasonable.
Another big piece of this bill is going to labor, health, and education. A piece worth over $66 billion in fact. With the dangerous state of our nation's public schools, especially in inner cities, this funding can hopefully assist all students in their quest to get a quality education. The health part will attempt to aid Americans afford healthcare, something that not all Americans can afford. This part sounds reasonable. Finally, Obama hopes that the money he spends on labor can help to produce jobs and lower the unemployment rate.
The chart goes on to say where the rest of the spending goes and how much each category will get. For the most part, this spending sounds somewhat necessary and at the very least, not unreasonable. The Republicans, such as Senator Lindsey Graham from South Carolina, would have you think differently. But when you observe where the money will actually go, it makes sense for our nation to spend money the way we are spending it. There are many problems in the country and this bill is doing its part to try to fix it.
CNN.com has an interesting pie chart that lets people know where exactly the money from the stimulus bill that Obama signed into law will go. The chart does not include tax provisions, and only shows where the spending allotment of $317.2 billion.
The biggest slice of the pie, pun intended, is the more than $98 billion aimed at energy solutions and our nation's environment. This is very important when alternative fuels can be produced, the energy part of this section, to save Americans money and, in turn, help the environment by reducing the dangerous emissions of CO2 and reducing the amount of fossil fuels that we use. This sounds reasonable.
Another big piece of this bill is going to labor, health, and education. A piece worth over $66 billion in fact. With the dangerous state of our nation's public schools, especially in inner cities, this funding can hopefully assist all students in their quest to get a quality education. The health part will attempt to aid Americans afford healthcare, something that not all Americans can afford. This part sounds reasonable. Finally, Obama hopes that the money he spends on labor can help to produce jobs and lower the unemployment rate.
The chart goes on to say where the rest of the spending goes and how much each category will get. For the most part, this spending sounds somewhat necessary and at the very least, not unreasonable. The Republicans, such as Senator Lindsey Graham from South Carolina, would have you think differently. But when you observe where the money will actually go, it makes sense for our nation to spend money the way we are spending it. There are many problems in the country and this bill is doing its part to try to fix it.
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