On the $8,000 Home Tax Credit Recently Extended

[Hauser]

Congress recently meddled in the free market (again) and extended the tax credit for people who wish to buy a home.

This makes about as much sense to me as when FDR paid farmers to burn their wheat and corn crops in order to keep their respective commodity prices artificially high.

Jesus Christ, why not simply let the prices of homes FALL so that they then become AFFORDABLE to more people?

And we actually ELECT these idiots? (well, not ME anyway, I've never once voted for a Democrat or Republican my entire life, with the notable exception of Ron Paul, of course)

In the free market, when there is a glut of unsold products, the market CORRECTS ITSELF by adjusting the prices to what people are willing to pay.........

When CONGRESS attempts to correct the market, they create the moral hazards of people buying more/bigger homes than they can afford, unrealistic lending standards, etc etc etc.......why can't they simply let the market correct itself?

(hint, *I* might be tempted to buy a home if their prices didn't force one to go into debt for 30 years, and had a more realistic\non-artificially-inflated price)

 

[MrEdd]

The government is desperately trying to fight economics.

True real estate values are directly tied to population density, and the true single person median income. You have houses that sold for 120,000 three years ago that are worth maybe 30,000 now that the bubble has popped, and with the high unemployment.

What does that do to millage income?

 

[Hauser]

https://www.youtube.com/user/PeterSchiffChannel#p/u/0/o1a4FIJB0aE

 

[Trucker51]

I'm afraid that you get what you pay for Alan. Today you can buy a house in move-in condition for $10K in both Flint and Detroit, and you can buy a house in move-in condition in Akron, Cleveland, or Toledo for $30K. I'm afraid that these prices are for houses in inner-city high-crime neighborhoods where the unemployment rate is rather high. As you probably know well, houses in the lesser neighborhoods of Benton Harbor, Grand Rapids, Jackson, Kalamazoo, Lansing, Muskegon, and Pontiac can be had pretty cheaply too. Perhaps you can convince your employer to allow you to work from home, than you can live anywhere that you have high-speed internet access.

Rightly or wrongly, there is a barrier to home-ownership. You have to either finance through the VA, along with the pre-requisite, or you have to come-up with the down-payment. If you want to live in a desirable area, a growing suburb with decent access to employment, decent schools, good access to recreational amenities, a high-growth area or region, you are going to have to come-up with more money for a down payment than you will in Flint. Often the higher-cost houses come with some additional benefits in terms of governmental spending too. They might plow your sidewalks, for instance, maybe even fix the potholes.

I believe that the extension of the down payment credit is as much designed to support home prices, as much as it is designed to help with the entry barrier. Here where we both live, our suburb does not need much help with supporting home prices, as we live in a desirable suburb in a modern, higher-growth, environment with better access to employment than many places. In various lesser neighborhoods of Denver or other large cities, with higher crime, dilapidated infrastructure and access to decent employment, even minority gang issues, yes, there is some need for home price support. Believe me, no homeowner wants to make it a lot easier to give free access to cross the barrier to home-ownership. After all, we all had to cross that barrier ourselves, and many of us homeowners have a substantial investment in our homes. And just as Edd says, governmental and educational revenues are all based on the value of the homes in their neighborhoods too. It almost sounds as if you would prefer to see everyone who bought a house lose a substantial amount of their investment just so that renters could afford to buy houses, and I'm afraid that isn't happening unless our economy completely collapses, at which point you won't have the money necessary to buy and defend your house either.

So why complain, and perhaps make use of the offered down-payment help instead? Home prices are depressed somewhat here, though not as badly as in many places, and you could afford more house now than you have been able to for years. Being able to put $8K down on top of whatever you have saved, along with a 5% 15-year mortgage, will get you over the threshold into home-ownership, and put you too on the road to saving home equity, like so many before you. Or are you too pessimistic about the chances of the economy to survive, therefore to pessimistic to take a chance on home-ownership at this time? If we do get into a period of serious inflation, home prices and rents will skyrocket, which will be good for owners, and bad for renters. Property taxes will also rise, which won't be as good for owners, who will have to raise their costs and rents to cover that too. I still think that your best bet is to join the ranks of homeowners rather than hope for a collapse of home prices just so that you can join a market that you have been excluded from so far, perhaps even by choice.

You can join us, or you can to continue to envy us, the choice is yours. Right now is your best chance in a long time to buy more house than you have been able to afford in many years. Why moan about it???

I say, take their money, happily, no questions asked,

Mark

 

[Hauser]

Thank you for your input Mark.

This doesn't change my opinion about our government simply not allowing the market to function.

Home prices need to fall.......period.

There are TOO MANY unsold homes. And the answer is...........ratchet up the current model even more so that the artificially-inflated prices can be sustained? Where's the logic in that?

Why should people who made bad investment choices be protected? I thought we only did that for rich, Wall Street bankers!

 

[Trucker51]

If we had totally unrestricted capital markets, there would be a few dozen really rich people, and everyone else would be living in cardboard shacks. The unemployment rate would be over 50%, and the few working people would comprise a sub class at the high end of poverty. There would be no such thing as getting a raise, no health care, no safety regulations, no labor laws of any kind. Either you work in unsafe conditions and don't complain or you can go back to the shack ghettos with the many millions of other luckless people who are there. If you were really lucky, you might be able to pay your rent in the company housing, buy enough to eat at the company store, buy your tools and whatever else you need at the company store too, and barely exist until the next payday, when you do the same thing with your paycheck all over again. There would be no savings, no getting ahead, no bettering yourself or your family, and certainly no house of your own no matter how hard that you worked.

Your photo is a little off, as the very rich are sitting on top of the fat guy, all nice and dry. Remember the line from the movie Repo Man, "Keep making me money kid"? That is what unrestricted capitalism is all about. We work, and they get rich. Is that what you want?

 

[Hauser]

How about eliminating corporate welfare, such as farm subsidies, and foreign aid, and a military industrial complex than President Eisenhower warned us against?

[video:youtube]https://www.youtube.com/watch?v=8y06NSBBRtY[/video]

Mark, we can compare my ideal limited-government world to that world where everyone is prosperous, everyone is free, everyone is safe, and everyone is guaranteed safety, and somehow the my idea of a more libertarian society falls short.

Is it a perfect world? No, but look at what we have now. We have a government that's of the banks and politically connected interests, for the banks and politically connected interests, and BY the banks and politically connected interests. Can't you see that this is devolving? Can't you see that there is no good ending to this?

I didn't say NO government, I said LIMITED government. Look at what we have NOW. We have 4 companies controlling more than 80% of the food grown in this country, we have about 4 major media companies that spew out misinformation every day, we have a half-dozen banks that essentially own our politicians, etc etc etc,........and all of their former employees get appointed positions on the White House Staff or are given special attention by Congress. None of this would be possible if congress represented the people instead of the rich. So what's the solution? Redistribute wealth? Well, you got it! Except that it's going from the poorest in our society to the very richest. How ironic. So what's the solution? More government, of course. You don't see a downward spiral here? You can't see them grabbing for themselves what they can before the whole shithouse crashes down?

The U.S. worker's standard of living has gone DOWN for the last 35 years! We're working longer hours, we're totally stressed, both parents are working now. Hell, remember the last time we ate out? I think I saw a waitress that was 7 months pregnant, and waiting tables. You think she WANTS to wait tables? Do you think that she would have to do that if this were the 1960's? Don't you see the country you were born into disintegrating before your very eyes?

End of rant................

 

[Trucker51]

Alan:

So you do think that some government interference in unrestrained capitalism is warranted??? You and I just draw the line at different places. I favor more government interference in the free markets, and you favor less, though you still believe in some limits to the free market too. The way that things are now with big companies is the result of too little government interference and oversight in the free markets. How about if just one big food company controlled 100% of all distribution beyond local markets? I could see that happening if we don't interfere in the "free" markets, and I could easily see just 2 major media networks, each spewing-out propaganda heavily slanted to their side too. Newspapers are almost dead as a method of delivery of media, since they have nearly been done-in by the internet and a loss of ad revenue. Should we interfere in the markets and rescue a few newspapers to attempt to balance our media?

I'm not happy with the direction that our country has been taking either. Figuring inflation, I made almost double in 1982 with 3 years of experience driving a semi, as I did in 2008 when I had almost 30 years of experience. Yet even so, because I own a house, I am derided as a member of the "ownership" class, and am somehow guilty of oppressing the poor "renter" class that you seem to identify with. I was a member of the "renter" class for many, many years too. I now have a vested interest in keeping house prices up. Do you support closing our borders to competing imports which have undermined our standard of living, as has been so popular in Michigan and Ohio over the years? That would be government interference in the free market, plain & simple.

Yes, there are lots of unsold homes, many too many in fact. How would you go about restoring some confidence to the housing market? Bankrupting many millions of homeowners just to get the prices down to a palatable level for the renter class would greatly damage the confidence in the housing market to a point where it might not easily recover. I know the economic heartbreak of growing-up in the southern Great Lakes myself, yet I see the problem as too little interference in the free market, not as too much interference. Yes, I have seen many older adults working at menial labor jobs lately, including waiting tables. How will damaging the housing market any worse than it already is help these people get better-paying jobs? If anything, a further collapse in home prices would make the problem of older adults working 2nd jobs even worse, as many homeowners have a substantial portion of their retirement assets tied-up in their home-equity.

You have a really good chance of taking advantage of the system that you so despise here Alan. So why not take advantage of it? Why not use their $8K as a down payment and get yourself into the home-ownership class, build-up some equity instead of paying rent, in effect making someone else rich? You can continue to fight us and continue to make someone else rich, or you can join us and then have a vested interest in keeping confidence in the housing market high too. Us homeowners are not your enemy, we are just a hair more fortunate than you find yourself and/or we have just a hair more confidence in investment that you do. Otherwise we are very much alike.

A concerned member of the home-ownership class.