Global Recession – How Obama’s Financial Policies Will Help?

The global recession and the worst financial crisis is staring at the world. US being the epicentre of this financial mess and has now pinned all hopes on the new President Barrack Obama to save them from the clutches of this financial crunch. Wall Street has taken a severe beating; because of the sub-prime crisis all the major banks went bankrupt and caused a major dent to the investor sentiment. It is hard to gauge how the country and the world will recover from this blow. The President is definitely under severe pressure and bears the responsibility of rejuvenating the Great American Dream.

With people losing jobs on a large scale and the domino effect of this turmoil to rest of the nations has led to an emergency situation. Only time will tell how Obama’s financial policies will help the situation.

New tax policy

Obama is intending to modify the tax policy, which will increase the marginal tax rates to 36% and 39.6% from the existing rates of 33% and 35% that will be quite similar to rates that were during Clinton’s Presidential rule. For people who earn $700k will fall under this new tax net; their yearly tax bill will be higher and for people who earn $250k can breathe easy as this rise will not affect them. The President’s administration tax policy will also look into raising capital gains rate and dividend rates to 20% and 28%.

Plans financial and corporate sector

Obama has asked public companies to prioritize investor’s profile with additional responsibility. And also wants the banks to have adequate liquidity to avoid further bankruptcies. The President also wants government supervision and intends to give additional power to the Federal Reserve to mange the banking sector. President Obama is a true Democrat who believes in financial reforms and to upgrade social welfare and security. He wielded the whip on companies that outsource work to other countries, implying when there is unemployed youth in US the companies cannot go and seek services of other countries labor.

Other measures

The President has promised to regain the investor sentiment in the market. He has also guaranteed to solve the housing crisis by providing instant relief to the house owners and save the home owners from the recession phase.

President also wants to induce another stimulus package to boost the economy and augment the unemployment insurance. With all these promises, President Barack Obama definitely seems to have chosen the right tools to deal with the economic slowdown. But how far he is going to succeed is the million-dollar question if anyone dares to bet a million-dollar! Time alone has the answer.