Let the Great Experiment Begin!

America, I'm afraid we just blue ourselves.




As I ponder the election results and consider that President Obama will take office on January 20th, I'm beset by Tobias Funke quotes for some reason. Here's a Tobias soundboard if you'd like to hear the quotes from the Doctor's mouth.

Personally, even though I supported Senator McCain, I'm encouraged by the enthusiasm and excitement surrounding President-elect Obama, both at home and abroad. (I studied a broad once...)

Many of my concerns regarding President-elect Obama have been addressed through the debates and his campaigning this Fall as he fleshed out his previously nebulous platform. Nevertheless, I still have serious reservations about the prospect of raising taxes in the face of a recession. If President-elect Obama intends to "rollback" President Bush's tax cuts and increase government spending, as indicated, I hope he has the sense to wait until our economy and the U.S. dollar both stabilize.

I also hope that our new President-elect recognizes the need to fix the housing market first. http://fixhousingfirst.com/ Since our economy has transitioned from manufacturing-based to service-based and retail oriented (following the lead of most European nations), consumer confidence/sentiment has become more critical to our economic health. When people are happy and optimistic they spend more and are more apt to expand existing businesses or start-up new ones, which ultimately stimulates the economy. In order for that to happen, consumers, entrepreneurs, and all Americans have to feel secure about their homes.

President-elect Obama now has four years to back up the rhetoric and charisma with substance. Here's hoping he does.



Below are the Fix Housing First talking points for any TGS readers who want to educate themselves some more about this important issue (of course, that assumes you weren't led here to The Spike by a Google Image search for Dave Charvet).

The Problem: Falling home values are at the core of the current economic crisis. Home prices and property values continue to dramatically decline across the country, affecting hard-working Americans everywhere. Americans are hesitant to buy homes now because they fear prices won’t stabilize anytime soon. Existing home inventory is nearing an all-time high and increasing as foreclosures flood the market. All sectors of the economy are affected because housing is so central to our daily lives. Thousands (soon to be millions) of jobs across all industries have been lost as a result of the housing crisis. Consumers have stopped purchasing, and small businesses are failing.

The Solution: Short-term, targeted incentives will encourage Americans to buy homes again.

[In 1975, Congress passed a short-term $2,000 tax credit for all new homes ($12,000 adjusted for today’s median home prices) coupled with subsidized mortgage rates. The stimulus jump-started the depressed economy and the effects continued long after the measure expired.]

What’s needed now to create a housing recovery:

• Enhance the Home Buyer Tax Credit
  
• Eligible purchases: primary residences between April 9, 2008, and December 31, 2009.
  Credit amount: 10% of home price capped at 3.5% of FHA loan limits (geographically dependent) ranging between approximately $10,000 and $22,000.
  
• Eliminate recapture.
  
• Monetization: credit available at time of closing.
  
• Below market 30-year fixed-rate mortgage for home purchases
  2.99% rate available for contracts closed between now and June 30, 2009.
  3.99% rate for contracts closed between June 30, 2009 and December 31, 2009.
  
• Continue foreclosure prevention measures to keep people in their homes, help stabilize home prices and bolster the economy.
  

The Effect:

Reviving demand positively affects the global economy.

• Stops the fall in home values.
• Encourages people to buy NOW instead of later.
• Restores consumer confidence and gets them spending again.
• Enhances the hard work that has been done to shore up our financial system.
• Creates jobs opportunities across the country in every sector.
• Energizes the economy!