Here are my two suggestions for immediate relief for normal Americans:
1) Loss on sale of home tax benefit
Let home-owners who must sell their home in a down market realize some sort of tax benefit for their loss. Businesses can already do this, but pity the poor individual who currently gets the shaft. Home-owner decides “what the heck, I lost my job and can’t make my mortgage payments, and darned if I’m going to live in a $300,000 home that I bought for $350,000. I’m going to foreclose.” Let the tax benefit have some kind of carry-forward provision. “Homeowners can amortize the difference between house sale price and house purchase price over a 10 year period on their 1040”
2) Lock in student loan interest rates TWICE
Poor uneducated college graduates who think they’re doing the right thing by locking in their multiple variable interest rate student loans into one simple loan. It made sense to us all at the time. Instead of writing checks to Sallie Mae, Wells Fargo, Department of Education, and Perkins – all at different and high interest rates – I can just write one check to Department of Education and lock in a rate at 5.5%. Wow, 5.5% is an all time low, this is great! But fastforward 7 years. You still owe tens of thousands of dollars. In fact it feels like you’re not making a dent in your loans. By now that all time low 5.5% is now down to 2%. That could have saved you $50,000 or $100,000 on the life of your loan. “If only I could have seen the future,” you cry. “I would have waited seven years, writing 5 checks every month, and then locked in my student loans…” Again, if I were a business, I could swap rates and lock in rates an infinite number of times. But Uncle Sam has poor uneducated college graduates in a vice grip. Squeezing interest out of us 5.5% annually and mocking our myopic decisions to lock in our rates soon after we graduated.
I’m not sure if I actually made the suggestion in there, but I think you get the point. Do you have any other great ideas that Obama should bring forward that aren’t being talked about in the press? Ideas must make an immediate impact on normal people.