Barack Obama took the presidential oath yesterday amidst much media galore. Months of speculation regarding the 44th president of US have finally ended. The outgoing President, Mr. George Bush left him a rich legacy of murky recession, obstinate credit crunch and loads of national debt. The financial-crisis strategy of the new President and his team as of now looks impressive and promising enough to rejuvenate the economy. In a broader perspective, it envisages cash flow towards domains such as development of alternative sources of energy and effective distribution of power and energy thus generated; development of social infrastructure and utilities which will generate employment; healthcare and education. Taxes would be cut down but for only the lower and middle income groups, the affluent won’t be spared. Almost $850 has been requisitioned from the Treasury to put a 2-yr scheme in practice, due to be announced b y mid-February.
On intricate level, the major step by government involves easing the prevalent credit squeeze. Banks would be relieved of their bad-mortgages and other toxic assets with government funding so that they can concentrate on credit expansion scheme. Troubled Asset Relief Program (TARP), which has been in operation for three months now, failed to produce substantial results, mainly because the banks that were granted aid didn’t actually use it to create credit but stocked it to improve their balance sheet. To avoid this, strict norms regarding usage of allocated funds and transparency have been issued to the receiving banks. The bottom line is to see the credit flowing. Nothing else will do!!
Governments around the world are looking forward to the US economic recovery as they in their own capacity have sanctioned loads of money towards reclaiming their from the depths of recession by announcing various financial stimulus packages. Their success also depends upon the US recovery in a major way. The best indicator of this fact is the sensitivity with which the international stock induces react to the American happenings. With the expectations soaring high, the people are sure to run out of patience very soon. What the administration needs now is a series of quick success-bound measures which will instill confidence in the masses and keep them afloat with hope.
