Poor Homebuilders

Thomas Oliver in the Atlanta-Journal Constitution,  thinks he has it figured out that bailing out homebuilders and their banks is the way to fix the economy.  I thought we were already helping banks.  But apparently it was the poor home builders who were hurt first and most.  And their bankers too - boo hoo.

Remember poor Pulte  whose CEO only made barely $11 Million in 2004? 

Home builders and their ancillary business partners were the first in the unemployment line. Others from other industries soon followed; to be followed by ever more as the fallout continues to reach into every corner of the economy.

Because the world just revolves around the suburban Atlanta sprawl building machine. 

Until we fix housing, we’re just whistling in the dark while offering to fix or build or underwrite this and that.

The mother of all stimulus packages was amended in the Senate last week with U.S. Sen. Johnny Isakson’s (R-Ga.) $15,000 tax credit for home buyers.

Assuming it makes it through the legislative process, it would help entice potential home buyers from off the sidelines.

Mr.  Oliver is tripping if he  thinks we can fix the economy by doing the same thing that broke it. 

We'll see unicorns from the windows of the houses -  these fine representations of American Dreaming -  when their "sale", on the basis of  yet even more credit, builds the economy.

I hear whistling in the dark. 

Comments

[Hunter]

It seems a little odd that Mr. Oliver makes no mention in his article about the current $7500 refundable (and repayable) housing purchase credit. Did it help? Did it have no effect? Chances are he nor anyone else knows because that credit has to be claimed on your 2008 return which are only just now beginning to be filed.

The new credit is non-refundable and doesn't have to be repaid. But as with the current program, it would have to be claimed on the 2009 return which means any refund wouldn't be in the hands of a taxpayer until a year from now. How is this an immediate stimulus?

Further, the new proposal must be claimed within 2 filing years. That means you must owe at least $7500 in each year. For a married couple filing a joint return that equates to over $58,000 gross income. In 2004 the median household income in NM was $38,000.