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When President Obama talks, everyone listens — especially when the topic is about the economy. Of course, we all know what is going on right now. Everyone can attest how bad our economy is. But how much do we really know? And how will this affect the credit card industry? The truth is, we really don’t know enough, and at this time of age where information is becoming more of a necessity than a commodity, then knowing more about what is going on in the economic world is vital to making informed decisions later on.
So, going back to the proverbial question: Just how bad is the economy right now? Everyone knows that it’s in a staggering near-life-and-death situation. Although we are not saying that it is impossible to solve, we should be aware of them nonetheless. And the first thing to do is to focus on the two most pressing problems that need immediate attention. These are:
The problem with wages. Wages become stagnant while prices continuously increase. According to an article at Obama’s website, “the cost of in-state college tuition has grown 35 percent over the past five years. Health care costs have risen four times faster than wages over the past six years. And the personal savings rate is now the lowest it’s been since the Great Depression.”

The problem with tax cuts. The truth is, tax cuts favor the rich instead of the middle class. The Bush administration went all out in giving tax cuts to those who earn over a million dollars. In fact, it went all out that the cut was 160 times greater than the middle-class earners. In addition to this, Bush has neglected health care, education and housing benefits for the middle class.
With all these problems happening in the current scene, how does it affect the credit card industry? To start with, economic downturns cause fluctuating interest rates to happen. In addition, President Obama acknowledges the main problem of most consumers when it comes to credit cards — exploitation from consumers.
These situations have led him to recognize the “predatory credit card practices,” and here are some of the solutions he will implement in his administration.
First, Obama and Biden will create a five-star rating system so every consumer will be abreast with the risks of using credit cards.
Second, a Credit Card Bill of Rights will be established. This will help stop credit card companies from taking advantage of consumers.
Third, a credit card rating system will be created. It will be modeled on five-star systems used in other products. This will help consumers identify a credit card’s ranking system, based on the card’s features. In addition, the credit card companies are mandated to display this rating on all application and contract materials, making the consumers well-informed of the major provisions of credit cards without going through pages and pages of lengthy documents that discourage people from completely reading it.
Fourth, a Credit Card Bill of Rights to protect consumers will be implemented. This plan will ban unilateral changes, apply interest rate increases only to future debt, prohibit interests of fees, prohibit “universal defaults,” and require prompt and fair crediting of cardholder payments.

President Barack Obama’s bailout plan is expected to create and even help save at least 2.5 million jobs related to the design, building, and maintenance of renewable energy projects.  These jobs include ironworking, window manufacturing, power distribution, and alternative energy as well.

These news jobs are also expected to prompt community colleges, power companies, and state energy offices to put up training programs to help both seasoned and new workers adjust well in to their new occupations.  More and more people believe that the obama bailout plan may very well be providing jobs to most of the people that have been aversely affected by the global recession.

There are, however, those who believe that the obama bailout plan may very well be causing an even greater problem, and this may very well be a problem that has no immediate solution.  The bigger problem is best explained by a look on a series of situations which could have a significant impact on the American economy.

The bailout plan, as proposed by US President Barack Obama, requires massive monetization of debt by the Federal Reserve, as well as huge new debt issues from the Treasury.  This situation in turn poses the question:  will the US dollar’s status as world reserve be threatened by this massive debt monetization?  Will this be further compounded by the multiyear mutitrillion dollar issuance of new treasuries?

These are pertinent questions because of the following reason: The United States has an economy that is primarily dependent on imports for sources of energy, shoes, clothing, and even advanced technological products.  Should the US dollar ever lose its current status as world reserve, the US will not be able to pay for the imports that sustains it, and this is undoubtedly a crises that is sure to be an even bigger problem than the current economic pinch.

President Obama has recently allayed fears regarding this issue by issuing a statement during a press conference, saying that the US dollar remains strong.  This is on the back of the belief of President Obama’s advisers that the US will have no problem monetizing debt and issue new debt endlessly, since the capital markets of the US are the deepest and most liquid in the world.

Experts, however, still maintain that the current direction of the Obama bailout plan may not be the way out of the crisis that the US is looking for.  Many believe that to avert the even bigger crisis that is looming in the background, the US must focus on saving the dollar’s status as the reserve currency.  This is seen as being done by reducing the US budget and trade deficits, a proposal that may not be the most welcome for the Obama administration.