Saturday, October 23, 2010

Don't blame Obama, blame the banks for the slow recovery

dustin larimer photo

Many Americans - perhaps most - are justifiably frustrated at the slow rate of economic recovery. And many are pointing at the administration for the lagging rebound. But is the president really to blame?

In a political year, with mid-term elections just a little more than a week away - it's easy to answer "yes." But I just saw an interview on CNN which points to a different answer.

The interview focused on the so-called "magic number" - the credit rating you have to reach these days in order to qualify for a loan.

The number used to be 680, the expert said. Now, he told CNN, it's 720.

Meaning, despite record low interest rates, it's much more difficult to get a loan. And that obviously translates into less money flowing in the economy.

Combine that with the number of people out of work, and those who are afraid that they may lose there jobs, and you have a populous that is far more prudent with its spending habits.

Less money flowing in the economy translates into a slower recovery.

So, it doesn't really matter who is occupying the Oval Office, or who has the majority in Congress. The facts don't change.

The banks aren't lending money as readily as they used to. People who have resources are pulling back on non-essential spending. And the recovery is lagging.

So don't blame Obama. Blame the banks.

1 comment:

Celeste said...

I have to agree with you on this one Gary, it is nearly impossible for anyone to get a loan these days. Someone with avaerage credit has little to no hope at all even if they have a job and can easily afford the payments. The lack of loans does translate into a lack of spending and poses no help in stimulating the economy whatsoever.