This week, Obama is pushing for tougher regulations on the finanial sector. He believes that this will protect consumers while restoring "accountability, transparency and trust in our financial markets." He says that the financial crisis occured because of a lack of risk evaluation on Wall Street.



"Let me be clear: The choice we face is not between some oppressive government-run economy or a chaotic and unforgiving capitalism," Obama said. "Rather, strong financial markets require clear rules of the road, not to hinder financial institutions, but to protect consumers and investors, and ultimately to keep those financial institutions strong."



Many Republican members of Congress (who also openly opposed the $700 billion stimulus package) are openly against further regulation of the financial sector. They mainly believe that tighter regulation will "stifle ingenuity."



I'm pretty much on the fence with this issue. On the one hand, I think that things need to change. Obviously something went wrong and it needs to be fixed. The government needs to take action. Just look at what resulted from President Taft's policy of strict laise faire during the Great Depression, the economy slipped further and further into a recession. On the other hand, everything I know about economics is telling me that the markets should be free to regulate themselves. The laws of supply and demand are unbreakable and almost certainly act in our benefit. However, this debate has been going on for ages. So far, the best thing is a combination of government regulation and free market capitalism.

Also this week, Obama is seeking to raise taxes on the weatlhy in order to provide healthcare for the uninsured.

"Obama's budget proposal would effectively raise income taxes and curb tax deductions on couples making more than $250,000 a year, beginning in 2011. By not extending former President George W. Bush's tax cuts for such wealthier filers, Obama would allow the marginal rate on household incomes above $250,000 to rise from 35 percent to 39.6 percent, said an administration official."

This robin hood plan would reduce the tax returns wealthy donors revieve by donating to private institutions. Many colleges are upset because they rely heavily on private donations. As a college student, this really affects me. I would not be a happy camper if my school was shut down. While i understand the need to reduce spending and the need to amp up Medicare, I don't agree with the means we're going through with it.

Coming from a upper middle class family, the increase in taxes would definitely affect me. And since i don't recieve benefits from Medicare and Medicaid, I'd have nothing to show from these increase in taxes.

Even with these measures, "the budget will still find itself in the red with deficits remaining above $500 billion over the second half of the decade."


Thirdly this week, legislation is being pushed through congress that would , "would let bankruptcy judges reduce the principal and interest rate on a home loan. That essentially would require mortgage companies to let debt-strapped homeowners reduce their monthly payments rather than lose their main residences" Many banks are against this legislation saying it impose unmanageably costs on companies which will translate to higher costs to buyers.

While many banks are against it, they realize that this bill will likely go through and are making "least-worst" attempt to cooperate. These banks are working to modify the bill to restrict the measure to certain kinds or sizes of home loans, certain borrowers, or situations where the mortgage holder — known as the loan servicer — agrees to the changes.

I think it's important to get this housing crisis under control. However, I didn't default on my payments so why should I support something that rewards those who did. I understand the need to help these people, but that doesn't mean I like it. For me this means a higher cost to recieve a loan, something that I will inevitably do after graduation.