Today’s Economy
The economic downturn has impacted the entire nation. With the jobless rate higher than it has been in decades, the housing industry failing, and healthcare costs being at an all-time high, none have gone unscathed by its effect. The government’s latest “answer” to the tumultuous state of the economy are the job’s bill and the housing initiatives.
The housing industry demise began with greed. Business in America was flourishing and many Americans desired to obtain the American dream. Many were not financially secure and able to afford all that they desired. That is when the government and the banking industry stepped in to help by offering mortgage loans without requiring down payments or much proof of credit worthiness. Many were able to purchase homes that they could not afford without any consideration to the ramifications of their actions. The demand for houses began to boom. This led to a boom in the construction industry, the building supply industry, real estate industry, and electrical companies. Americans were lulled into a false sense of security as things appeared to be going well.
The greed grew as the construction industry then began to overproduce new homes. The supply then became greater than the demand as they continued to build new homes. New construction companies began to pop up all over the country. This led to new electrical companies, painters, and other small industries opening businesses. This led to a boom in gross product distribution because more people were working, thus more were spending money on clothing, shoes, and goods.
Then, the homeowners who had purchased homes they could not afford began to struggle financially. They began to buy fewer goods in an effort to have enough money to pay their mortgage. Some began to default on their mortgages, leaving mortgage companies holding the bag on the homes. Suddenly, the supply was much greater than the demand. This began to impact all of the industries who had profited from the housing boom. Small businesses began to close, and others laid people off. The economy began its downward spiral.
The government is desperately trying to find a solution to the economic downfall. Many proposals and ideas have been presented in multiple forums in an effort to turn the economy around before the recession that plagues the nation becomes a depression. President Barack Obama has recently proposed a four hundred and forty-seven billion dollar jobs package that he feels is an answer to this problem. This package includes expanded tax cuts for workers and employers and spending for infrastructure projects. It also provides for state aid to keep teachers and emergency responders at work, based on an article from the New York Times as reported by msnbc.com. Opposition on this comes from the plan to offset those costs with higher taxes on the wealthy.
According to the Los Angeles Times website, the House and the Senate have issues with portions of the bill and, as is often the case, cannot agree on what should and should not be included in the bill. According to this article, there is, however, one provision of the bill that both sides appear to be embracing. It is the repeal of the three percent tax on companies contracting with the government. The Senate was three votes shy of advancing this provision when they closed for recess last week. The House is expected to vote on it this week. They are still very divided in other components of the bill. It would appear that there are no fast solutions to the devastating condition of the economy.
Due to this stall in the jobs plan, President Obama is kicking off a new offensive plan this week. According to an article in the New York Times as quoted by msnbc.com,