Thursday, February 05, 2009

Stupid Senate Tricks: Housing

The Senate, not to be outdone by QueenNancy's idiocies, passes their own.

The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession

Some Republicans are just plain stupid. Here's one good example:

...Senator Johnny Isakson, Republican of Georgia, a former real estate broker, who was the prime sponsor of the homebuyer credit, said it was modeled after a similar, $2,000 homebuyer incentive that helped lead the country out of recession in 1975.

He's wrong. Take a peek at the chart on this post and note: 1) the 1975 credit was for NEW housing only; 2) it provided only a very short-term shot; and 3) most of the increase in home-purchases occurred many, many years later. IOW, the credit was not of particular value (except for an election cycle.)

Rational thinking is in very short supply in Congress; but here's a bit of actual economic truth:

Adam Posen, deputy director of the Peterson Institute of International Economics, said that homebuyers would have trouble accessing loans because of the continued tightness in the credit markets....

They are also structurally unsound,” Mr. Posen said of the two provisions, “reinforcing the attempts of industries that are too large — housing construction, automobile production — to survive based on government distortions.”

Stupid Johnny and his Senate cohorts--pushing water uphill, using taxpayer labor.

What a country!!

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