The Democrats are in a tight spot. In the mid-term elections, the Grand Old Party – the Republicans won a resounding victory. This has indeed dealt a jolt to the Obama government. This has sent many people to premature retirement. The main reason behind this has been the weak economy and the increasing foreclosures.
The Republicans really enjoyed a thumping success in the House of Representatives. The pollsters had predicted that they would pick up only 60 seats. It also seems that the situation will be repeated in the Senate.
It is the weak economy that is the major reason behind this debacle. Voters did not buy the argument that the situation could have been worse. They feel that the present government did not do much for the economy. Enough effort was not taken to create more jobs. Republican voters said that spending should be curbed. Even the size of the government should be reduced.
Republican leaders said that they would never compromise with President Obama. They said that the President’s comments were not conciliatory before the elections. The Republicans also said that many countries, for instance, India, China and Brazil are going ahead in the race. The fiscal condition of the US is yet to be fixed. First, the real estate market is in a mess.
As unemployment peaks, people who had enjoyed excellent credit scores have now defaulted on mortgage payments. Another scandal that rocked the market was that documents of people were not checked properly. Thousands of documents were signed without proper verification. Homeowners are now being thrown into the street, even without court notices. These are the people who had brought the country to the brink of financial ruin. Economists say that most people will not forget the scandal in a hurry.
Also many homeowners are trying hard to cling onto their homes. They can no longer afford these homes, yet they do not want to let go. Earlier, the foreclosure crisis was triggered off by the fancy loans of sub-prime lenders. Now the middle class who have lost jobs are the main reason behind the increasing foreclosures.
The Federal Government had come up with a program by which loans of homeowners are being modified, first on an experimental basis, and then permanently. The program picked off on a slow pitch but has now picked up pace. Critics observe that the program has been a failure. The program will help many homeowners, .50 million to be precise, but it would put a lot of burden on tax payers.