Will Obama's $33 Billion Tax Credit Help Stall the Foreclosure Slide?

It is no secret that a large part of the current wave of foreclosures is due to the high unemployment rates ravaging the country; home owners without jobs have difficulty making mortgage payments and many of them have ended up with homes teetering on the brink of foreclosure.

To help alleviate the problem, the President has announced a proposal of 33 billion dollars in tax credits to hopefully support the hiring of workers by small businesses across the nation to prop up struggling employment rates. As the political scapegoat for the struggling economy, President Obama is working to reverse some of the economic trends that we have been seeing progress for the past few years.

The new proposal for the 33 billion dollar tax credit is aimed at helping small businesses hire new staff by providing them with a $5,000 tax credit for each employee hired up to a maximum of one hundred new employees. Estimates suggest that up to a million small businesses could be assisted by this initiative. An increase in jobs would support the recovering economy by putting more money in the hands of consumers which would, in turn, help create more jobs and support the economic recovery.

The proposed tax credit program will hopefully begin to take shape very soon; there are a great number of homes with delinquent loans on the verge of foreclosure filings all across the country which belong to home owners who are un- or under-employed at present. While it is likely that this new proposed tax credit is not going to single-handedly turn the tide on the current wave of foreclosures that are poised to start happening in the first quarter of the year, it is hoped that it can—in combination with other programs—help to put more people in jobs that will help put money in their pockets to spend.

With the changes that the government has made to the mortgage modification program recently to help home owners who are delinquent on their loan payments, it is possible that these new initiatives to get more people working can make some headway into changing the trends that we have seen in the housing market over the last year. Hopefully the government will continue to work on supporting the recovery of the economy until we are out of the recession.

http://www.reuters.com/article/idUSTRE60S0BH20100129