Comments on: Fun with the Homebuyer Tax Credit

By: capt dave

capt dave — Fri, 23 Oct 2009 16:52:22 +0000

The housing credit, like many of these “small” giveaways, will increase in cost forever. The $15 Billion cost will have to be borrowed, and will never be paid back. The interest ($3.8 million a year based on current .38% one year treasury) cannot be paid, and more bonds must be sold. The interest therefore compounds, which is not much of a problem at ZIRP, but would be a problem at a more normal, say 3%. My math may be wrong, but at 3% the debt doubles every 23 years.

This fact was brought home to me by a poster about the Cash for Clunkers. The debt for the credit would double into perpetuity, but the new car would be in the junk yard in 12 years. Not a glowing report card on our economic experts in DC.

By: Pat G.

Pat G. — Thu, 22 Oct 2009 21:54:23 +0000

Chump change!! Tell me how TARP was spent. Show me the path the money followed!! To where did it go?

By: The Curmudgeon

The Curmudgeon — Thu, 22 Oct 2009 21:34:17 +0000

The amount of fraud in any market is directly proportional to the level of governmental manipulation of the market. Want more fraud? Always and forever, the answer is to get more government involvement. Direct manipulation, like tax credits, begats the most fraud. Indirect manipulation, like pouring massive amounts of money into a market by fed purchases of bonds used to fund the market ($1.25 trillion), gets less direct fraud, but then, effectively, makes the whole market a fraud.

The residential real estate market in the United States is a fraud built on a fraud. It will soon enough collapse, sorta like the Berlin Wall.

By: Robespierre

Robespierre — Thu, 22 Oct 2009 19:49:11 +0000

Unbelievable?

Why Barry is this unbelievable? Whenever regular people see the big shots loot with impunity (government sponsored) they will eventually figure that they deserve their “fair share”. When you have a two tier justice/enforcement system in any country, the country eventually slides into lawlessness and this is the worst damage that these capos have cause this country.

By: DeDude

DeDude — Thu, 22 Oct 2009 19:46:00 +0000

Bruce; the GDP is reported as a delta not in absolute terms. It is designed to lose its effect. The 0.8 trillion stimulus was designed to stop the drop of the cliff fall from a 2 trillion drop in aggregate demand, not to substitute private enterprise as the engine of the economy. The fact that is took us from -6% GDP numbers in Q4-08 and Q1-09 to -2% in Q2-09 and break even in Q3-09 is pretty impressive. A lot of people who would have been without jobs if the -6% had just been allowed to continue unopposed are happy that someone cared and stopped them from losing their jobs, homes and everything they own in a great depression.

By: Mannwich

Mannwich — Thu, 22 Oct 2009 19:28:04 +0000

@lalaland: You’re absolutely correct. It kind of feels like it’s the last grab at the carcas that is the U.S., doesn’t it?

But I have to correct you – - not ALL of us engaged in this behavior that you describe. In fact, I would submit that most have not engaged in it all but have watched it unfold with horror, amazement, and morbid fascination. Some of us are STILL doing that now.

By: lalaland

lalaland — Thu, 22 Oct 2009 19:20:41 +0000

I love how we con, loot, and pillage the system every chance we get (those who applied for or gave out liar loans, inflated appraisals, scammed the gov’t cashforclunkers or first time buyer rebates, etc.) and then blame the government for our collective bad behavior. Or blame wall street. Or blame the chinese/saudis/russians/koreans/mexicans (here and there). Blame the banks, the blacks, the political hacks, the lobbyists the educators; the collective finger is always pointing at someone else. Face it America, you sucked for the last 8 years. You elected a crap-ass idealogical/theological goverment. You wanted government to “stay out of your business” while the businessmen took advantage of you. You flipped that house! and turned it into an ATM and bought tanker-loads of cheap chinese crap. You didn’t manage your portfolio, you took enormous risks with other people’s money, you invaded 2 countries and didn’t care about the outcome, you wanted to live like millionaires, you over-extended, you lived on credit, so quit your bitching America.

By: MRegan

MRegan — Thu, 22 Oct 2009 17:30:12 +0000

Housing-China-Future:

My prediction: before 2035 there will have occurred an influx of 20+ million mainland Chinese citizens into the US (mostly the contiguous lower 48).

I plan on providing them with children’s clothing and shoes. And pillows in the shape of fruit.

By: Bruce in Tn

Bruce in Tn — Thu, 22 Oct 2009 17:28:35 +0000

http://www.nytimes.com/2009/10/23/business/23outlook.html?_r=1&ref=business

WASHINGTON (AP) — The government’s economic stimulus spending has already had its biggest impact and probably will not contribute to significant growth next year, a top White House adviser said Thursday.

The adviser, Christina D. Romer, the chairwoman of President Obama’s Council of Economic Advisers, said the initial jolt of the $787 billion stimulus expanded the economy in the second and third quarters of this year. But she said the remaining spending will simply keep the economy from slipping.

“By mid-2010,” she said, “fiscal stimulus will likely be contributing little to further growth.”

…Well, whaddaya know? 700 billion dollars and it was just for a one night stand. Franklin, I am so proud I could pop the buttons off my vest!

What’s that you say, Frank? That the 700 billion will have restored our economy, and that’s why it will “likely be contributing little to further growth”?

Yes, I see that. Yes, I do. Yep.

700 billion…everything’s all fixed…Yep…

By: dussasr

dussasr — Thu, 22 Oct 2009 16:59:31 +0000

One can also sell a house on contract to uncreditworthy buyers and use their tax credit as downpayment. When they “buyers” default a few months later you just take the house back and sell it to someone else.