According to the Booking Institution’ s Hamilton Project, research has shown that communities hit hardest during the recession potentially falter behind the rest of the country for many years to afterward. A few democrats from the Clinton administration created a policy to improve the parts of the economy that was, and are still, effected by the late recession.
Unfortunately for those “ under-water” home-owners, the policy may not offer a solution to the mortgages needing to paid, especially those that are over the value of their homes, $10,000 may not suffice for those individuals.
The proposal consisted of loans provided by government-sponsored banks to individuals who are looking to move and have been laid off for the last 5 years. On the downside the government would be spending between the $500 million to $800 million annually according to the University of Chicago’ s Jen Ludwig.
The government is making a valiant effort to help the US out of this crisis but it doesn’ t seem to be enough to shake the country back into place. Hopefully this policy will be a viable crutch to a recovering economy.
What are the demographics of these areas? Is the fact that they are lagging behind exclusively related to the current recession, or were these areas already economically deprived? This would significantly alter the sort of solution that should be offered by the government. I would also argue that if they are only suffering because of the overvalued mortgages, the government should focus elsewhere on places that could use actual help for real development
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