The Foreclosed Economy Threatens As President Elect Obama Takes Over The Reins

The foreclosed economy threatens as President elect Obama gears up to take over the reins. The first thing will be to instill optimism and hope into the ordinary man in the street that has pinned their falling hopes on him.

Roosevelt had faced a similar situation when he entered the White House in 1933. It is time to recall his first words,” So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself, nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

The imbedded memories of the Great Depression have caused the American government and financial bodies across the globe to jump into action and not take a hands-off attitude. The banks were rescued so that customers did not lose their money. Cash was injected into the system to keep it flowing and lenders could continue to lend.

Although the financial bodies have got back on their feet the economic recovery has hardly taken off as yet. The real economy continues to tumble at an increased speed. This cannot be done away by the President with any magic wand. This in fact is one of the major problems he faces – the expectations of the people that he can cure the disease fast. Policies will take time to give results but what one needs to understand is that had the government not given support, the situation would have become far worse – recession could have turned into serious depression. The ignoring of the problems of Lehman Brothers can be pointed out as a big mistake.

The line of hope is that economies tend to get back on their own feet by themselves. 2009 might not be much different from 2008 but there is hope that the things will start looking up from 2010. Even foreclosures are bound to run out of steam and the fall of housing prices will reach a final bottom. Recovery is sure to follow and it will do so during the presidential tenure of Barack Obama.

Foreclosures did not come out of the blue – out of nowhere. During the past 15 years and more, since 20003 Americans have lived beyond their means – they have been taught to do so by a dangerous consumer culture. It is today showing up in current account deficit, fiscal deficit and zero household savings. The collapse was inevitable when foreclosures pricked the balloon to burst.