America finds itself in a dire situation. Its a trillion dollars in debt and its economy is in turmoil. There are literally hundreds of solutions out there floating around but we want to focus in on one aspect of the economic stimulus bill working its way through congress. That is the $15,000 home buyer’s tax credit.
This tax credit is a government giveaway of up to $15,000 (or 10% of the purchase price of the home) to help stimulate the housing market. Once again our brilliant politicians in Washington have decided to treat the symptoms and not the disease.
It is 100% true that homes have dropped drastically in value and we have a number of years of surplus homes on our hands. But is this really why our economy is in trouble right now? NO! Our economy is in trouble for three reasons. Too much debt and not enough good jobs. (Good jobs can be described as paying a wage you can live on and providing for stable employment).
We liken our scenario in the US to having a deep cut in your leg. You have two options, first you can buy morphine or you could buy stitches. It isn’t as black and white as it may seem because of course morphine will help. Morphine will reduce your pain and may lessen the blood loss because your rate heart will be reduced. But choosing morphine is deceptive as you will continue to lose blood and eventually die. You could alternatively choose to stitch up your leg. Sure the pain may not go away but you will ensure that your condition will not get worse (blood loss) and eventually you’ll return to full strength.
This $15,000 first time home buyer’s credit is like choosing the morphine. Sure, your pain will be reduced, sure it may even create some jobs along the way, but it doesn’t get to the root of the problem. The deception is that it doesn’t ensure people will be able to afford homes on their own by having a job at a decent wage.
Stitches on the other hand are like creating jobs, it gets to the source of the problem. Creating a job may not make you feel any better if you already have a job or about the loss of value in your home. It will however help us reduce our debt because people will have a source of income. Our economy will return to normal where wages won’t be stagnant because of the large number of unemployed and where business can prosper because people will actually have money to spend.
I don’t think anyone in America wants the government to be giving people money to buy a home. Isn’t that part of what got us into this mess? Qualifying people for loans they couldn’t afford? Allowing people to have a loan which has a value higher than that of the home? More debt than income?
We at Reform America are often accused of being strictly liberal Democrats. I hope this serves as a notice that we are only about what is the best move for America. We have taken a more conservative stance in this than the Republicans who introduced this measure and the Democrats who helped pass it. We’ll leave you with an ancient Chinese proverb and only ask you consider it’s meaning in relation to our current situation: