Barack Obama Proposes Economic Policy

The economy is beginning to take its toll on many household budgets. And people nearing retirement are worried that they will not have what they need to get by. In light of this, Barack Obama has proposed six things he would like to do in order to ease the strain on personal finances at this time. These items do not encompass Obama's entire economic plan. However, they do offer insight into what he thinks will help most people on a personal level.

Barack Obama's economic policy ideas

1. Temporary waiving of penalty fees on early withdrawal. Right now, when you withdraw early from a retirement account -- your 401(k) or IRA -- there is a 10% penalty fee. Obama proposes that retirement accounts be made available for individuals who may want to tap them for emergency purposes during this time. The fee would be waived for 2008 and 2009 (retroactive to January 1st of this year). The income taxes that are part of early withdrawal, however, would still be there.

2. Put off required distributions. At age 70.5, retirement account holders are required to begin taking minimum distributions. With the stock market in flux, though, and down, this means that withdrawals can seriously harm what capital remains. Getting rid of required distributions means that accounts have time to recover along with the stock market.

3. Allow state and local governments to borrow from the Federal Reserve. In recent months, we've seen the Federal Reserve open its lending to specific banks and businesses. Now, Obama proposes that the Fed be able to lend to local and state governments. This would help these entities shore up local economies, and provide some policies and measures that may help people keep their jobs.

4. Tax credits for new employees. This is an interesting measure aimed directly at dealing with rising unemployment. For those who have lost jobs, the idea of a tax credit for bsuinesses who hire new employees could mean that they have a greater chance of finding a new job faster.

5. Extend unemployment benefits. As the credit market crisis continues, more firms are laying people off. Obama wants to extend unemployment benefits for 13 weeks to help those who have lost jobs supplement their incomes. Additionally, these benefits would not be taxed as income, and that would -- in theory -- help ease household budget strains.

6. Moratorium on foreclosures. If an institution accepts help from the government, then that company must put a 90 day moratorium on foreclosures. The idea is to induce mortgage lenders to work with homeowners on hammering out new payments plan that can help them say in their homes.