From the Big Picture econ blog:
A recent Brookings Institute analysis (found via Barrons) demonstrates persuasively that the $8,000 subsidy actually costs $43,000 per extra house sold; worse yet, the new $15k tax credit will ultimately cost $292,000 per home.
Read it all here. What the real-estate business needs is to let house prices find their proper level, not bloodsuck gummint money to hold on to glory days now gone. Lot of people that holler a lot about the free market and the oppressive gummint are first in line when the gummint's handing out cheese.
1 comment:
I hear ya, Mr. Loon. It has taken a while, but home prices are finally coming back to reality, I believe. I think that so many people just don't realize how big a responsibility buying a house really is, and the government is partially to blame here. Many buyers are biting off more than they can chew, with no small amount of assistance from the government and the underhanded lenders, then wonder why, a few months later, they are upside-down in their mortgages after reality has slapped them. Things like taxes, maintenance, and HOA fees were scarcely given a thought by people wanting to live in a champagne house while having only a beer budget. And then we all act amazed so many homes have gone into foreclosure. A badly needed reality check and course correction has been going on for a while now, and will continue until it hurts.....
What a great title. I couldn't have come up with anything better.
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