Obama’s debt relief plan: The American dream of a resurrected economy

The recent economic crisis has brought the mighty US economy on its knees. Though the economy shows signs of improving, the present state of affairs is far from satisfactory. People are losing jobs, bankruptcy filings are shooting up and people are defaulting on their loans at an alarming rate. It’s not only the debtors who are heading towards trouble but also the creditors. When the lenders lose money, the economy suffers. Under the circumstance, President Obama declared a debt relief grant of $787 billion last year with a view to boost the economy. As a stimulus for the struggling US economy, President Obama formulated a strategy of pumping a huge amount of money for debt relief. This relief is aimed at both individuals and business houses. The strategy also includes tax relief for debt-stricken people and organizations. This Obama policy states that financial institutions are entitled to tax benefits from the government whenever they settle the debts of their clients. Therefore, the lenders are getting a part of their money back and are willing to negotiate debt with the debtors more easily. This strategy will undoubtedly benefit both the creditors and the debtors. However, tax rebate should also be applicable on individual level. If tax charges are waived from the amount forgiven then it would help the debtor to get back to his feet sooner. Nonetheless, some federal tax rebate has been introduced. Clearly, this encourages debt settlement because bankruptcy filings on a large do not help the economy. If a person chooses to settle his debt through a nonprofit debt settlement company then he is eligible for a 50% reduction of debt. Of course, there is no guarantee that his debt will be settled. Obama’s debt relief plan is the foundation of The America recovery Act of 2009.It’s primary focus is to enhance employment opportunities, encourage investment and spending. Obama has applied the Keynesian theory to the present situation. Today the consumer spending is naturally at a record low due to recession. The government fills the gap by pumping money in the market. The $787 billion grant is accompanied by other benefits like unemployment benefits, government grants in different sectors like health care, education etc. However, you should understand that there is no such thing as federal debt relief program. Many debt relief companies lure you with “this term” and steal money from you. Avoid these scams and know that Obama’s plans are not debt relief programs which are applicable on individual level.

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