Opinions on Addressing Economic Growth and Problems with Distressed Properties
An oversupply of distressed homes for sale and high unemployment continue to hammer the economy of the U.S., preventing it from achieving the level of growth that is seen during normal economic times. Polarizing opinions have emerged on how these issues should be addressed, but a combination of some parts of these suggestions may be the answer.
Stimulus package vs. fiscal policy overhaul
The Federal Reserve is expected to launch another round of stimulus initiatives which will see the Fed buying more mortgage securities to put money into the economy and speed up its growth. Some believe this will not help, arguing that this will not lower the unemployment rate, which is the main economic problem.
There are those who recommend an overhaul of the fiscal policy instead, geared towards reducing uncertainty and encouraging employers to create more jobs. The fiscal policy, supporters of this recommendation have argued, is the main factor scaring off businesses from further hiring. If businesses can be sure of the direction of the nation's fiscal policy, they will be more willing to hire workers, something that stimulus packages will be unable to do.
Where the housing market stands
Both arguments have good points and weak points. Joblessness is preventing consumers from spending and this lack of spending transcends into the housing industry. The less willing buyers there are, the slower the housing market will recover.
The more problem in the housing market, the worse it is for employment in sectors associated with the industry. And all of these impact economic growth. Residential properties have never been more affordable than they are now, but not a lot of people are buying, mainly because most do not have jobs and, therefore, have no steady income, while others are just plain scared of the status of the market.
If an improved fiscal policy can be drafted and a stimulus package can be designed that will help lower the number of distressed properties, the job market, the housing sector and the overall economy will benefit. Careful thinking and cooperation are necessary to get all these done, though.
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