When Republican presidential candidate Mitt Romney and President Barack Obama square off in Colorado on Wednesday during the first presidential debate, Americans will be waiting for an answer to a key question: How are this country’s financial disasters going to be remedied?
From the student loan crisis to the sputtering housing market to the ever-teetering fiscal cliff, Americans are demanding answers from the candidates. But will they get any? Both the Romney campaign and the president have been long on rhetoric but short on answers. The following are just some of the hot-button issues that many American’s want addressed:
Both candidates have been mum on this topic, perhaps because it’s so complex. According to NPR, the Obama administration has tried a variety of loan modification programs to encourage banks to preserve homeownership. However, many have fallen flat. The Obama administration does say that 16 million homeowners have refinanced and 5 million others have modified their loans through such modification programs. Obama said he will fine-tune these programs if elected to a second term and create stronger regulations to protect future homeowners.
Romney’s campaign said that he would not abandon modification or refinancing programs already in place and would focus on rolling back new financial regulations and toning down mortgage giants Freddie Mac and Fannie Mac. Romney’s camp also said that the housing crisis is just one small piece of the overall picture; building a stronger economy and better jobs are the most important pieces.
Student Loan Crisis
With student loan debt edging toward $1 trillion nationwide, many are wondering if it will be the next financial disaster. Because of rising college costs, students are being forced to take out an increasing amount of student loans. For many, graduation doesn’t mean the economic windfall it once did. Many college grads are unemployed or underemployed and not able to pay back student loans.
Obama and Romney have differing views on getting help to those struggling borrowers. Again, neither has given concrete solutions to this looming problem. Earlier this year, Obama pushed for interest rates to remain lower for government-subsidized student loans. At the same time, Romney said he supports temporary lower interest rates for student loans but encourages students to “shop around” for the best college deals and not take out loans.
Spending Cuts and Tax Hikes
Coined by Fed Chairman Ben Bernanke, the term “fiscal cliff” refers to the nearly $500 billion in spending cuts and tax hikes that would kick in on Jan. 1 if lawmakers don’t act quickly. Some say this cliff could push the United States into a deeper recession and drive up unemployment rates.
Romney has accused Obama of standing idly by while the calamity unfolds. He has said the $54 billion in Defense cuts that would kick in at year’s end could be devastating. Meanwhile, the White House said it’s the congressional Republicans who are refusing to act on the issue. Obama has said that Republicans haven’t offered any meaningful plan to stem the looming crisis.
The ever-confusing world of tax codes has even the most astute financial planners scratching their heads. The inequities in the code allow many taxpayers, even those who fall in the same income brackets, to pay widely different rates depending on their deductions. Both Romney and Obama agree that it’s time to make some changes in tax breaks, but they are both short on details. Romney’s tax plan talks about lowering tax rates and closing loopholes so the government’s share remains about the same. Obama’s plan is said to attempt to lower the deficit with a lower tax rate.
But, as one economist noted, cutting loopholes may just slice into the heart of the American wallet. The two biggest tax breaks are for interest payments on home mortgages and the tax-free health insurance that many workers enjoy. If these tax reforms are ended, middle-class families will feel it the most.
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].
- Holland, S. (2012, August 15). Mitt Romney: Obama ‘Passively Allowing U.S. To Go Over A Fiscal Cliff.’ Reuters. Retrieved from http://www.huffingtonpost.com/2012/09/15/mitt-romney-obama-fiscal-cliff_n_1887223.html
- Liptak, K. (2012, August 22). Romney, Obama react to fiscal cliff report. CNN. Retrieved from http://politicalticker.blogs.cnn.com/2012/08/22/romney-obama-react-to-fiscal-cliff-report/
- Noguchi, Y. (2012, October 2). Candidates Say Little On Difficult Issue Of Housing. NPR. Retrieved from http://www.npr.org/2012/10/02/162099460/candidates-say-little-on-difficult-issue-of-housing