Wednesday, August 18, 2010

Unemployment & Foreclosures

There are roughly 30 million Americans who are either unemployed, under employed, working part time who want full time work, or who have just given up looking for jobs. That is roughly 20% of the work force in the United States. Even though unemployment benefits have been extended by Congress until the November elections, (gosh what a coincidence) millions will soon run out of weekly unemployment payments. Even so, the typical $300 - $400 a week in unemployment monies is not enough to live on anyway. And, studies show that prolonging unemployment benefits just prolongs unemployment as people do not take jobs they believe are beneath them until their benefits run out.

In any case, there is a direct correlation between real unemployment and the foreclosure rate in the nation. Currently, about 300,000 homes per month are going into foreclosure with no end in sight. Ultimately, the owner of most of these homes as they go into default is the infamous, now government owned, Fannie Mae and Freddie Mac, which is experiencing billions in losses at taxpayer expense. And, any attempt by the Federal government to prevent foreclosures, through loan restructuring, has been futile. While 400,000 loans have been restructured in an attempt to prevent foreclosure, for the most part foreclosure has been forestalled, not prevented as many of those homeowners end up in default anyway.

This vicious circle ties to unemployment, which results in foreclosures, which results in lower property values causing more homeowners to be upside down on their mortgages, which results in more foreclosures. It is estimated that there is an 8 year supply of foreclosed homes held by banks. As such, the housing market is likely to be a mess for years unless we get our economy headed in the right direction.

And, this is a double whammy. Many Baby Boomers used their homes as cash machines by taking out home equity lines of credit to pay for cars, trips, college for their kids, etc. They bet on forever home value appreciation and they lost. As a result, as Baby Boomers face retirement, when they should have had their homes paid off, they instead not only have mortgages on these homes, they are upside down owing more than the value of the home. Many Baby Boomers may walk away and allow foreclosure as the only option, unless they plan to work for years, because their retirement savings and or Social Security at retirement will not allow them to meet their current financial obligations.

The only way out of this spiralling mess is to grow our economy so that we experience job creation, which will bring an end to all these foreclosures and this vicious cycle. Unfortunately, President Obama and the Socialists that control Congress never learned the lessons of Economics 101 and we see the end result, don't we? Clearly, Obama's Trillion dollar deficit spending SwindleUS Plan that was supposed to cap unemployment at 8% has been a dismal failure. 3 million jobs have been lost since SwindleUS I was enacted into law.

While Obama may have saved some public sector jobs, it has all been at the expense of the private sector so we have experienced NO new net job creation. And, every time the Socialists enact, or propose some new Socialist Scheme like HealthScare that is raising the cost of insurance premiums, CAP & TAX that will raise the cost of energy and be a job killer and or allowing the Bush Tax Cuts to expire at the end of 2010, the private sector just hunkers down, rather than making new investments that would create jobs.

President Obama and the Socialists that control Congress, their environmental wacko friends and their union supporters are destroying our economy and it will eventually lead to the financial collapse of the United States as a result of the trillions in deficit spending if it is not stopped and soon. THIS IS A NATIONAL EMERGENCY. As we face the elections in 2010 and 2012, we must sweep these Socialists out of office by electing Conservatives who support free market capitalism, limited government, lower taxes and less regulation, a balanced budget, term limits to help end the corruption in Washington, a strong national defense, including securing our border and fighting Terrorism, real energy independence and health care reform, the right to bear arms, the sanctity of life and family values. This is the winning platform in 2010 and 2o12 supported by the majority of the American people and the only way to restore economic growth and job creation and to stop the foreclosures.

We have to sweep these Socialists, who resemble the Keystone Cops in a silent movie, out of office by electing Conservatives who support the Constitution, as written by our Founding Fathers, not as contrived by the left wing media, Socialists Obama, Reid, Pelosi, former Presidents, Congresses, or the Courts. We must take back our country in 2010 and 2012. We can do it. We must do it to preserve our freedoms, our nation and way of life and for the sake of our children and grandchildren.

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