Going for the Gold in Housing, First Time Home Buyers
September 30th, 2009A lot of hub bub was created this week when Barack Obama decided to go to Denmark to lobby for Chicago to host the Olympics. Spokesman Gibbs when asked why the president would leave when Health Care legislation was close, responded; the president believes health care is in much better shape now. Really? Rasmussen reports 56% continue to oppose health care reform to 41% who support the takeover, a new low. Where’s Obama? Off to Denmark for Olympic gold?
Some people question the priorities of the president when news was released this week that the commanding General in Afghanistan reported the need for 40,000 more troops or we will lose the war (from back in August!). Obama has vacillated upon the request due to the need to have the socialist left in congress (who oppose sending more troops) to be able to pass the health care government takeover. Soldiers are in harms way, the commander asks for help, and Obama jets off with Oprah to Denmark in search of Olympic gold?
The unemployment rate is at 9.7%, forecast to go to 10%, will probably fall below the 9.7% in September when reported on October 2, because hundreds of thousands will have exhausted their benefits and are no longer counted. The Stimulus bill isn’t stimulating the economy, is 90% pure liberal pork projects that will establish nothing enduring, and Obama jets off to Denmark searching for Olympic gold?
The one portion of the Stimulus bill that actually has stimulated the economy is the first time home buyer tax credit due to expire December 1, 2009. Several bills are in committee at congress to extend, or expand the tax credit. Obama jets off to Denmark with former Olympic athletes, Michelle, and Chicago folk going for Olympic gold?
It’s true that Obama will leave one afternoon and be back the next day, a very short trip. During the primaries I warned everyone that if Obama were nominated and elected, the nation could look forward to Chicago style politics going national, and to observe the Blagojevich run state of Illinois to see what that would look like. After only eight months in office how does that look to you? A president gallivanting off to Denmark while health care, Afghanistan, and the economy take a back seat to Chicago, going for the Olympic gold.
After the short jaunt, if Obama is serious about economic recovery, he should help get an extension and or an expansion to the tax credit for home buyers. Don’t count on this happening, when all of a sudden liberal leaning institutes like Brookings realize that deficits are soaring.
On September 25, the State Journal Register reported; The Brookings Institute said extension of the credit would be ‘a mistake’ at a time the federal deficit is soaring. The estimated $15 billion dollar cost of the tax credit is twice what was projected when the program started. OK, you can understand this point of view, because deficits are bad for growth. But when you have the congress and Obama quadrupling the record annual deficit, with $1.8 trillion in deficit spending in one year, the $15 billion is only .008% of the total.
Two questions; where in the heck is all the rest of that $1.785 trillion going in one year, and why in the heck would you want to cut the portion of the quote ‘Stimulus’ plan that is actually stimulating the economy?
The SJR went on to say; The study also warned that an extension might re-inflate the housing bubble that caused the crisis in the first place. Say what? I’ll take a double of whatever they’re drinking over at the Brookings Institute! New home sales jumped an incredible seven tenths of a percent in August bringing new home construction all the way back to only 60% below the highs, and existing home sales fell in August 2.7% for the first decline in five months and stand only 45% below the highs.
Is The Brookings Institute really saying that extending the tax credit would cause a 160% jump in new home construction? If that is accurate, then that should be the reason to do it. Millions of jobs would be created.
Secondly The Brookings Institute must have missed that the housing bubble was not created by tax credits. The housing bubble was created by The Community Redevelopment and Investment Act by Carter in 1977 and put on steroids by Clinton in the 1990’s through Fannie Mae, Freddie Mac, and HUD. Simultaneously Greenspan and the Fed kept interest rates low for too long.
When the Bush Administration through the SEC went to congress to reign in the abuses, the shining stars of the left, Maxine Waters, and Barney Frank blocked the SEC in 2004 stating in committee they saw no impending problems in Freddie and Fannie. Several years later Freddie and Fannie were insolvent, and had to be taken over by the government costing tax payers hundreds of billions of dollars, and continue to run tens of billions in the red today.
If it were not for The Community Redevelopment and Investment Act the abuses that followed on Wall Street would never have occurred, and the financial meltdown of 2008 would have been avoided. The TARP bailout became a fraud when hundreds of billions of dollars went to Wall Street, National Banks, AIG, and to buy GM, and Chrysler, and not for the stated purpose of buying up toxic assets. A fraud of historic proportion!
So Brookings is now saying $15 billion will break the bank by inflating the deficit? Brookings should listen to my recommendation that the current Stimulus Plan be voided, cancel the remaining $630 billion in liberal non-stimulative pet projects, and double the money to $150 billion for infrastructure improvements, and implement a $10,000 tax credit for all home buyers, increasing to $15,000 for the purchase of new home construction. Then we could have a chance at a real recovery, and putting millions back to work.
What does all this mean to first time home buyers? Because the tax credit has helped stabilize the biggest housing slump in three decades, because it has worked so effectively as do all tax credits, and tax cuts, because it makes absolutely perfect sense to do so, what do you think the congress full of economic geniuses will do?
In other words take the bird in the hand, and not the two in the bush. Interest rates incredibly have remained at historic lows. There is little doubt this will not last. There is real potential for skyrocketing interest rates in the near future due to the never seen before spending, borrowing, printing of money, and the most massive increase in national debt, and unfunded liabilities in our history, which will cause inflation and higher taxes. Americans will have to pay some day, and it is going to be painful.
This does not even take into consideration the hidden taxes contained in the proposed Cap and Trade, and Health Care albatrosses working their way through congress, that in my opinion if passed, will extinguish any hope for an economic recovery. How does the $15 billion for home buyer tax credits compare to the estimated $3 trillion these two bills will cost?
Now is the time to buy a home, especially if you are a first time home buyer. This in fact could be a once in a lifetime opportunity. The tax credit expires in mere weeks on December 1, 2009.
By the time we return representatives and leaders to national office who don’t hate capitalism, and who don’t embrace redistribution of wealth, that have an ounce of economic sense, to reign in spending, taxes, and illegitimate legislation, it may be too late to correct within our children’s or grand children’s lifetimes. Obama economics is sentencing them to a lifetime of debt and a lower standard of living.
If Obama wants to go for the gold, he shouldn’t go to Denmark, he should stay home and help the economy by pressing for legitimate stimulating legislation such as tax credits for home buyers, and helping the troops in Afghanistan.
