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Housing Crisis Becomes Election Issue

[Jan 11, 2008.]


The nation's housing crisis has now emerged as a key issue in the race for the White House.

Democratic Presidential candidate Hillary Clinton is running an ad in which she spotlights the crisis, which has led to widespread foreclosures and increased fears of recession.

The ad states that Clinton "called for action on America’s housings crisis in March, in June, in August." The ad further claims that President George W. Bush and Wall Street did nothing to alleviate the crisis. The commercial also notes that home prices have plunged and that millions of Americans may lose their homes.

In response to the crisis, Clinton is offering a plan which would freeze home foreclosures, freeze rates on adjustable mortgages, and provide tax relief for middle-class Americans. The ad ends with the tag line, "When we choose a President next year, let’s choose one that would have started fixing our economy this year."

However, the Bush Administration is likely to question the veracity of Clinton's claims. For instance, the Administration has put forward an agenda for helping those with adjustable rate mortgages to keep their homes. In addition, thus far the housing crisis has not led to a full-scale recession, indicating that the problem may have been contained.

Some analysts are urging the Federal Reserve Board to cut interest rates further in order to aid the housing market. The Fed has reduced rates in the recent past, although it's unclear what kind of impact that has had on home sales. Some observers expect the housing crisis to continue until at least the middle of this year, while others forecast that the troubles will last until well into 2009.

As the Presidential campaign continues, the housing crisis may become even more of an issue. Public opinion polls indicate that the war in Iraq is becoming less of a top issue for Americans, while domestic problems are gaining more prominence.

Julie Ann Amos
January 11th 2008

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