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Attack of the Home Buyers’ Tax Credit

 
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samz



Joined: 19 Feb 2008
Posts: 102
Location: Medford, MA

PostPosted: Tue Nov 10, 2009 1:47 pm GMT    Post subject: Attack of the Home Buyers’ Tax Credit Reply with quote

http://economix.blogs.nytimes.com/2009/11/10/attack-of-the-home-buyers-tax-credit
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admin
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Joined: 14 Jul 2005
Posts: 1823
Location: Greater Boston

PostPosted: Tue Nov 10, 2009 3:19 pm GMT    Post subject: Reply with quote

This is a really good point that hadn't occurred to me:

Quote:

One of the reasons for subsidizing homeownership is the widely held belief that homeowners are good citizens.

...

If you think that civic engagement is important enough to justify homeownership subsidies, then we certainly shouldn’t be encouraging excess mobility.

But the new home buyers’ credit does just that.

It subsidizes existing owners to trade up or down, which implicitly encourages people to pull up roots and sever their connections with their existing community. If you ever thought that encouraging civic engagement through housing policy was a good thing, then the current policy will push in exactly the opposite direction.

- admin
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samz



Joined: 19 Feb 2008
Posts: 102
Location: Medford, MA

PostPosted: Tue Nov 10, 2009 3:34 pm GMT    Post subject: Reply with quote

Yeah, it's really shocking how much worse the extended program is than the original program. (I like the fact that the author has data to back it up, too.)
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admin
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Location: Greater Boston

PostPosted: Tue Nov 10, 2009 3:39 pm GMT    Post subject: Reply with quote

samz wrote:
Yeah, it's really shocking how much worse the extended program is than the original program. (I like the fact that the author has data to back it up, too.)


This isn't the first expansion, either. Remember back when the tax credit was an interest free loan that needed to be paid pack? Then it was a pure handout. Now it's a handout for those with high incomes and existing homes. Hey, maybe we should all just wait a few more years while it continues to grow - eventually taxpayers will just buy our entire homes for us.

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samz



Joined: 19 Feb 2008
Posts: 102
Location: Medford, MA

PostPosted: Tue Nov 10, 2009 3:46 pm GMT    Post subject: Reply with quote

admin wrote:
samz wrote:
Yeah, it's really shocking how much worse the extended program is than the original program. (I like the fact that the author has data to back it up, too.)


This isn't the first expansion, either. Remember back when the tax credit was an interest free loan that needed to be paid pack? Then it was a pure handout. Now it's a handout for those with high incomes and existing homes. Hey, maybe we should all just wait a few more years while it continues to grow - eventually taxpayers will just buy our entire homes for us.

- admin


I know; it's so painful.

I said something like that to a realtor who was pushing me to buy before the current program expired. She was trying to make it sound urgent. Yeah, right.

I love the idea of temporarily exchanging houses with a friend. You probably don't even have to move out to make the scam work.

I also suspect that this new program is very bad for Boston because it makes it that much easier to get out of this hellacious market.
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admin
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Joined: 14 Jul 2005
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Location: Greater Boston

PostPosted: Tue Nov 10, 2009 4:18 pm GMT    Post subject: Reply with quote

samz wrote:

I also suspect that this new program is very bad for Boston because it makes it that much easier to get out of this hellacious market.


Oh, that's another good point that hadn't occurred to me. The expansion of the credit to existing owners will encourage excess mobility, and people may take advantage of that to get out of high cost areas. I thought that the credit would continue to inflate prices (and to an irrational degree for as long as people can be fooled into having a sense of urgency), but the expansion to existing owners makes it a real wild card. It could actually depress prices, especially over the long term.

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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Wed Nov 11, 2009 12:07 am GMT    Post subject: Reply with quote

admin wrote:
This isn't the first expansion, either. Remember back when the tax credit was an interest free loan that needed to be paid pack? Then it was a pure handout. Now it's a handout for those with high incomes and existing homes. Hey, maybe we should all just wait a few more years while it continues to grow - eventually taxpayers will just buy our entire homes for us.

- admin


I believe there was a woman on CNN who had a similar idea. She said people in her town are struggling to buy jackets to keep warm. Her idea for fixing the economy was for the government to give every citizen $50k.
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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Wed Nov 11, 2009 12:09 am GMT    Post subject: Reply with quote

samz wrote:

I know; it's so painful.

I said something like that to a realtor who was pushing me to buy before the current program expired. She was trying to make it sound urgent. Yeah, right.


Haven't you seen that Coldwell banker commercial? It says that no matter what else, it's important that we never stop moving. Yeah. Um, why?
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admin
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Joined: 14 Jul 2005
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PostPosted: Wed Nov 11, 2009 12:30 am GMT    Post subject: Reply with quote

balor123 wrote:

I believe there was a woman on CNN who had a similar idea. She said people in her town are struggling to buy jackets to keep warm. Her idea for fixing the economy was for the government to give every citizen $50k.


That could actually work, though not for the reason she suspects. People could burn their dollars for heat.

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