With the growing number of jobless claims and the real number of unemployed and under employed in this country climbing to what analysts say is close to 17%, you have to ask the question about housing. Is housing playing a bigger role in unemployment than most people realize? Are jobs so intertwined with the housing market that this effect is going unnoticed? The simple answer is yes.
The housing bubble, if you want to call it that was a regulation, greed, man made disaster waiting to happen. With the appreciation in housing over the last 10 years and more so in the last 5 years you had to see it coming. With government regulation leading the way to push lending to home buyers with less then perfect credit and people flocking to jump on the American band wagon of home buying even if they couldn't afford it you see that the bubble if you will had no choice but to burst.
When housing started to depreciate and people's loans started to readjust suddenly, if you can say suddenly, most people that had these arm's and negam loans new the time lines of their adjustments but just ignored them or did not plan properly to handle them. So the question is really, who's fault is it anyway? With so many trying to blame the other guy or the last administration or the current administration there is one thing that is being missed, the unemployed. We can debate all day long on whose fault it was, but that doesn't change the fact that it happened and we need to figure a way out. Housing is so intertwined with unemployment rate in this economy that it makes sense that we need to do something about housing without losing focus on jobs.
According to Realtytrac the national number of people receiving foreclosure notices in October was 1 in every 87,743 with California at 1 in every 155 housing unit and Nevada at the hardest hit being 1 in every 79 housing units receiving foreclosure notices. There is a main reason that foreclosures continue to rise and that reason in directly tied to unemployment. With a national unemployment rate at 10.2% and when you add in the under employed and those that have stopped looking and are no longer getting benefits that real number is closer to 17%.
What is the solution that we need to bring to Washington as the administration talks about a jobs summit? Economists around the country differ in their recommendations, you here about raising taxes, more stimulus, cutting taxes, more bailouts and the like. With all this chatter it makes you wonder if anyone really has the answer, but one thing is for sure something has to be done.
In an effort to get people back to work it is going to take all of us working together, cutting the red tape and pulling ourselves up by the boot straps to make this economy work again. With Washington becoming so focused on healthcare reform, cap and trade, and all the other bull it is going to take a grass roots movement to get them refocused and re-engaged with the American people to assist us in getting people back to work.
I have a few suggestions that just might work.
Cut payroll and business taxes at both the Federal and State level Empower the SBA to make direct small business loan ( instead of going through a bank ) Loosen restrictions on credit to small business capitol Create incentives for employers to hire through tax incentives for hiring Remove ridiculious rules for continued unemployment benefits like the 40 times you weekly benefit amount in earnings in the quarter prior to your initial unemployment claim. I think if you qualified for unemployment to begin with you should automatically qualify for an extension, right now that is not the case. Provide retraining benefits for those who want to retrain for another career and use the hiring incentives to place those students with company sponsors. Engage the private sector in the retraining process even providing them with subsidies to retrain and then hire the individual
With this said there are many common sense ideas in the market place and with out Washington engaging the employers those ideas will remain hidden.
On the housing front banks have received billions upon billions of dollars to stay afloat but yet they have been reluctant and in many cases unwilling to work with homeowners to modify loans. This is an extremely lame approach on their part for someone who wouldn't even be in business with out the very people's tax dollars that they are refusing to help. We are all in this together, I agree that there was a lot of people that played the system and may have bought more of a house than they could really afford but the banks are just as much to blame as the government regulations and politicians who said everyone deserves to own a home. We have to start working together and understanding this dynamic in order to rectify the problems that this country is facing.
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