For the near-mortally wounded middle class facing foreclosure and in danger of defaulting on student loans President Obama’s State of the Union address provides band-aids where tourniquets are needed. What help is being offered pales when compared to the bailouts so lavishly and eagerly handed out to banks and auto companies when they screamed in similar distress. Still, America’s imperiled families will take what little the President is offering as there is no other help available, especially not from a Congress that seems blithely prepared to let them bleed.
Obama’s revised plan to help families refinance and reduce their mortgages is a start, but does not go far enough to close that sucking chest wound. Saving $250 a month on their mortgage payments will be a significant relief to those families fortunate enough to qualify, but the plan is not open to those most in need. Homeowners who have fallen behind in or have been late with their mortgage payments, even if their loan-to-value ratio is now in the negative column, do not qualify. Thus the people most likely to lose their homes, to suffer the indignity of foreclosure, are marked the equivalent of Class IV in triage. They are classified as requiring extensive care that is beyond the capability and time of medical personnel. In other words, for them all that is left is to call the chaplain.
Young Americans laboring under massive student loans similarly will get some help under Obama’s proposals, but again, not enough to let them live. For the first time in history student loan debt now exceeds credit card debt, and most of that is being carried by a single generation (and their parents). Asking Congress to reduce the interest rates on the $830 million banks hold on student loans will be some help – if Congress acts, which is a big “if” – but as with homeowners in crisis more is needed. Individuals who amassed huge debts while getting an education need serious and immediate help; they need their debt to be reduced, restructured, refinanced and relieved. Without such attention, how will they ever become the homeowners, the job-creators or even the consumers that the economy needs to recover?
The banks who charge six or eight percent on those student loans received that money virtually interest-free from the government, and most of those banks got a bailout. Obama said in his State of the Union address that banks “rescued by taxpayers” should be given “a chance to repay a deficit of trust.” How better to do this than to relieve and restructure mortgages and student loan debts, and to do so in a manner that will allow families and young people a chance to eventually make a full recovery?
President Obama’s latest proposals may help some, but they are not even emergency room-level answers for a nation that needs major surgery to stem its hemorrhages and save its shattered limbs. While welcome, they are little more than the comfort a school nurse would offer (in schools that are still fortunate in this age of budget cuts to have a nurse) until the EMTs show up. Unfortunately for those Americans most in need, the ambulance dispatcher is not even picking up the phone.
Mark G. McLaughlin is a Connecticut-based free lance journalist and game designer with over 30 years of experience as a ghost-writer, author and columnist. His latest work, the science fiction adventure novel Princess Ryan’s Star Marines, is available on Amazon.com in both paperback and Kindle e-book formats at http://www.amazon.com/Princess-Ryans-Star-Marines-Save/dp/1466218487/ref=sr_1_3?ie=UTF8&qid=1325530055&sr=8-3
To view and pre-order what will be Mark’s 16th published design, the American Civil War Naval strategy game Rebel Raiders on the High Seas, visit http://www.gmtgames.com/p-238-rebel-raiders-on-the-high-seas.aspx
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