Current Economy Calls For Creativity In Mortgages

While I am happy about being able to keep more of MY MONEY, an extra $65 a month is not going to make a big difference in my spending habits. However, if I were to receive the entire $800 tax cut as a lump sum, a big screen LCD TV would be in my future, and I could buy it with the full knowledge that I was doing my patriotic duty to help stimulate the economic recovery.

In an effort to spread even more good news about our economic situation, investor George Soros says that there is no short-term resolution to the crisis because the world financial system has effectively disintegrated. Mr. Soros' comments are very similar to those made earlier by former Federal Reserve chairman and top adviser to President Obama, Paul Volcker. Mr. Volker said that the level of industrial production around the world is declining more rapidly than levels in the United States, which itself is under a severe strain. Mr. Volker went on to say, "I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world."

According to a Reuters poll of economists, U.S. unemployment will top 9 percent before the recession is over, pointing to a significantly bleaker economic outlook than just one month ago. What about the 91% of us who are still working? Instead of telling us how bad the situation is, and that it is going to get worse, give us some encouragement. Calm our fears about the situation and remind us that our situation has not changed. We still work and get a regular pay check. Make it clear to us that by giving us back a few extra dollars of our own money, you need us to go out and spend those dollars.

Maybe I'm wrong, but my perception is that the mortgage crisis is the cause of most of the financial instability we are now experiencing. (I don't care to explore the reasons for the mortgage crisis in this limited space.) The mortgage crisis can be resolved, or at least made to be less of a crisis, by finding creative ways to help people stay in their homes and make those monthly payments. At the same time, the government has to do something to ease the feelings of resentment that are building among the people who are living up to their obligations. We feel that bad behavior is being rewarded, and that we have to pay for it. Mortgage lenders also have to come up with creative ways to encourage and make it easy for prospective home buyers to get mortgages with payments they can afford to make, consistently and regularly, and are not adjustable.

Bill is a 51 year old IT Professional who enjoys political blogging at www.theconservativenation.com in his spare time after work and after the daily grind at the gym.