Achievements and Failures in the Implementation of Fiscal and Economic Policies in the Obama Administration

President Barack Obama took over the US presidency in January 2009. During the elections in November 2008, the American people, particularly the African Americans, saw the new spurring of high hopes to reckon the degenerating US economic situation. The US economy collapsed in shambles bearing blanket losses in the job market blamed upon the majority fusion of tax dollars predominantly supported the war and reconstruction efforts in Afghanistan and Iraq for almost a decade, and the country’s defense arm is uncertain whether troops will draw back from the war front to end war efforts and restore America’s financial liberty. Simultaneously in the start of FY 2007, a sharp surge in unemployment rate at aggressive paces reached the peak at all time record surpassing the worst recession experienced in thirty years, but the inability to cope the challenge in numbers came escalating without control the first time in US history at the end of 2009 to the most part of 2010 attribute to the Great Financial Crisis at which the housing sector collapsed in the domestic market and resorted to spread the failure to international financial institutions in domino effects borne to the  inability to cope the rising of interest rates in fixed income markets and job market degeneration. Globalization also contributed to the job market contraction due to the terminal effects of immigration, mergers and acquisitions among firms, and relative to the timing of the height of the financial crisis overlapping the uncertain proposition of the incoming Obama passing from the Bush administration.

Since Obama’s succession to the presidency, the Progressive Economist statement launched specific sets of macroeconomic and financial reforms that could protect the global economy from a massive slowdown.  The Obama Administration proposed and implemented a large scale of macroeconomic and financial initiatives for reform. The complexity characteristic in addressing these issues is so immense and pervasive requires a consensus based and cohesive international efforts to address the issues undermining the integrity of economic policies whether it may enable to cope with the current financial crisis. The solution to the challenges that avail to the disposal of the government limits on short term financial problems while striking the balance with the norm to promote an egalitarian and sustainable path towards economic development.  However the Administration failed to meet this initiative to cope the financial crisis despite coordinated efforts for a global fiscal response through an international coordinative approach that ended the banking and financial industries into turmoil, as an extension regime of the remnant policymaking structure characteristic to the Bush administration. The resulting turmoil caused bore to the inability to provide reconstructive and restructuring efforts within the international community and the lack of transparency among economies in the recovery of the banking and financial sectors that persisted facilitated by the demonstrated shortfall of attentive scrutiny and failure to propose longer term financial alternatives. Simultaneously at the height of economic policy immobilization intense political factions surged criticizing the Administration for its impotence in fiscal and economic sound policymaking and the dilemma that caught the administration to a halt upon widespread reaction by the public in the implementation and testing of fiscal and economic policies. This caught the Administration to an impasse whether how to strike the balance upon correction for sound policy resultsamid the dichotomy between Democrats and republicans between the executive and legislative branches.

Resolution to the critical challenge of the housing market that caused the Great Financial Crisis the Obama Administration responded in a positive manner though not to an extent as expected. The home mortgage crisis caused by the nonsettlement or delays in settlement of mortgage backed securities on a timely manner became a massive social crisis in the United States in history. Millions of Americans lost their homes due to prolonged joblessness since the crisis started while banks are holding billions of dollars of bad assets. A major effort is imperative to address this insurmountable issue and brought to resolve by passing new laws by the Administration attempting to suspend involuntary foreclosure. The strategy weighed on Freddie Mac and Fannie Mae to purchase new housing loans at which causes to lower mortgage costs and make available affordable at larger shares to the homeowner public. This allows people to refinance their existing mortgages even the loan values exceed the home values at least by 5 percent. This yields the mortgage values to be reduced in lower monthly payments compared to original values before refinancing for distressed homeowners. This plan also allows bankruptcy judgments to modify to enable principal amount to be written without the risk of lawsuits imposable from bondholders collateralized debt obligations based on these mortgages. Though this scheme the Administration implemented is effective, many critics regard this to be helpful to one third of the affected population of homeowners.

The American Recovery and Reinvestment Act enacted in 2009 with the Democratic majority in Congress passed this fiscal stimulus package, involved 787 billion US dollars to stretch spending over ten and a half years. This plan reflected a lot of significant compromises. The stimulus plan of over 800 billion US dollars planned for spending in a span of two years, the first year spending weighted at  23 percent and the second year spending at 91 percent. The purpose of the bill centralizes the fact that spending is allotted for infrastructure building but compelled to allot the budget portions to respond to concurrent recessionary pressures.