Economic stimulus nears the home stretch

The economic stimulus package heads for a Senate vote this week and could make it to the desk of the President by weeks end. The stock market is likely to continue trading in a wide range until investors believe the bad economic news is behind and a bottom has been reaced in the market. Friday’s job report was a clear indication that the economy ran into serious problems in the fourth quarter of 2008 and the fallout is continuing.

The economic stimulus is likely to feature a few economic incentives aimed at restoring the U.S. housing market. There is growing speculation that the package could include a tax credit to be used towards home ownership in the amount of $15,000. Most of the previous moves the government has tried to pass to stimulate home ownership and slow down the home foreclosure challenge have not been successful including a $7,500 tax credit and the hope for homeowners program. The governments decision to begin purchasing mortgage backed loan securities in late December spurred a surge in home refinance loans, however this move has not resulted in a spike with home purchases. Turning around the U.S. housing market will be critical to fixing the U.S. economy, and this is one of the major focal points of the Obama administration as they prepare their economic and fiscal policies for their first term.