President Obama is meeting with economists, local officials, businesses and labor leaders to create a strategy that will lower unemployment and help end the recession. But what strategy will really work in our efforts to turn this recession around and lower unemployment? Some legislators have suggestions that include "letting the cards fall where they may" to dipping into the remaining banker bailout money and using it to stimulate the economy.
Nancy Pelosi said:
Congress should use leftover money from Obama's $787 billion stimulus package, passed earlier this year, to pay for road, bridge and other public works projects and to help struggling state and local governments retain firefighters, police officers and teachers. She also promised help for small businesses.
There is approximately $140 billion left in the bailout fund set aside for big banks and financial institutions. The White House administration has refused to touch that money; but Pelosi and others are hoping that the administration changes their position.
While I believe that plan to invest in this country's infrastructure, safety and educational institutions are critical to our long-term health and stability, we really need an approach that will address all of the issues driving this recession. Currently, there is an unemployment rate of 10.2 percent, a foreclosure crisis that's out of control and debt crisis that has over a million Americans filing bankruptcy.
It may be prudent for us to provide some type of direct bailout for homeowners facing foreclosure due to a job loss. Currently, it can be very difficult for unemployed homeowners to avoid foreclosure via loan modification programs because they don't have enough income. Unfortunately, they can't increase their income because of the difficulty of finding work. Direct aid to these individuals would be a powerful tool in preventing foreclosure. Also, extending the COBRA subsidy for at least another 24 months would help millions of Americans avoid medical debt. Currently, many Americans cannot afford healthcare after a job loss and end up with medical debt due to an illness.
Right now the best way for many to get relief from medical debt is via bankruptcy. By extending the COBRA subsidy we will decrease the amount of Americans who become vulnerable to medical debt after a job loss. And finally, we need to give the bankruptcy courts the power to modify toxic mortgages. Right now mortgage companies are playing a decisive role in fueling the foreclosure crisis by failing to do their part in preventing foreclosure. If we take a strong position and force the hand of these lenders, we will increase our chances of stopping the recession.