Housing Rebound? Not So Fast By MIKE WHITNEY

October 29th, 2009

Plucking the Turkeys

Housing Rebound? Not So Fast

By MIKE WHITNEY

Senate Democrats are a dogged bunch. And they're not easily deterred from their primary duty of kowtowing the big banks. Case in point, the first-time home-buyer tax credit, the controversial bill which provides an $8,000 tax credit (re: subsidy) for new home buyers. Changes in the bill, will provide a $6,500 credit to homeowners "earning up to $250,000 for couples" if they have lived in their home for five years.

The Senate is pressing ahead with the bill despite overwhelming disapproval from liberal and conservative economists. Their main objection? It's a waste of money. The Brookings Institute estimates that the $8,000 credit costs taxpayers $43,000 per home. This is based on the fact that 85% of the nearly 2 million buyers were planning to buy a home anyway. The new add-ons to the bill mean that its final costs will be much greater than originally anticipated.

The senate bill is nothing but a $6,500 bribe to keep people in their homes and out of foreclosure. It's another giveaway to the banks so they don't have to face the mountain of debt they generated through fraudulent loans. The banks aren't satisfied with merely blowing up the financial system and extracting trillions of dollars from taxpayers to fix the mess they left behind. Now they want to ensure that they're a constant drain on public resources, by diverting dollars earmarked for healthcare or state aid into broken institutions run by high-stakes gamblers. The Congress has played a critical role in this fiasco.


http://www.counterpunch.org/whitney10292009.html

I didn't see the bill, only an announcement of it, so maybe the article I read was wrong.

But I didn't see a $6500 tax credit as a "bribe" to "keep people in their homes" because it's only for people who are buying new homes, not staying in them. My understanding is that people who owned their last homes for 5 years before selling will qualify for a $6500 tax credit if they buy a new home by April.

The $8000 tax credit for "new home buyers" was *also* for people who hadn't owned a home in 3 years -- that was the case all along. So those who got out of the market prior to '06 and were renting have an added incentive to buy now rather than wait.

The reason they've added the $6500 tax credit is because there are only so many 1st time buyers on the market, and most of those jumped in with the credit. So yes, they are helping another set of people to buy homes and they are also helping people in dire need to sell.

It's all going down anyway. What difference does it make if they add a little more to the deficit to help individuals, compared to the trillions of giveaways to the banksters?

This bill is a *good* thing for me. I'm trying to sell so I can meet my new, severely straightened, circumstances. I missed this window due to a corrupt realtor. I'm grateful the window has been propped open until spring so I can keep trying.

:hug: