How Will Obama Deal with the Sinking Economy?

By Chad Ingalls

Before he can address some of the major concerns of his campaign such as increasing health care insurance coverage, improving education, and dealing with climate change; he must deal with the economy that is steadily sinking into recession.

There is an anticipated stimulus package to be put in place when Congress returns from its winter recess, anticipated to be worth approximately $200 Billion. This even after the $700 Billion dollar bank bailout, and will increase the federal deficit over $1 Trillion.

The first step is heling homeowners and recover from what many believe to be the major reason behind the economic crisis as the mortgage market issues spilled over into the credit market. Among other strategies, using Fannie Mae and Freddie Mac to refinance all of the “underwater” mortgages, which may cost as much as $50 Billion. Other suggestions include refinancing everyone’s mortgage with low rates, accumulating a $300 Billion dollar tab. Whatever the case, expect something out of Obama regarding the housing market early in his term.

In order to offset tax cuts put in place by Bush for households earning $250,000 or more, Obama is expected not to give tax cuts at least through 2010 when Bush’s tax cuts expire. However, Obama is planning on providing refundable tax cuts to middle class families, who saw borrowing against their homes and driving up credit card bills over Bush’s term with a declining standard of living.

With the unemployment rate at 6.1% and an expected rise to 7%, Obama will enact an energy infrastructure program, creating 5 Million green jobs. He intends to invest over the course of the next 10 years to increase spending on green programs in hopes to ensure stronger economic growth in the future.

One of Obama’s major concerns will be healthcare. He plans to extend coverage of the Children’s health insurance program, as well as expand the amount of people eligible to be covered by Medicaid.

All in all, there is a lot of work to be done by Obama, probably one of the most extensive agendas for any new President in their first term. Time will tell if Obama is the man for the job, and the economy needs a lot of help real soon.