Hat tip to Pigpen sent along this clip from abcnews, via zerohedge; go to -9:50 mark where the senators are discussing the housing tax credit. If this is any indication, it’s looks like an extension of the credit is going to happen:
http://abcnews.go.com/Video/playerIndex?id=8746931
An excerpt from zerohedge:
There was a love fest on ABC’s This Week. The odd couple was Senators Schumer (D.NY) and Cornyn (R.TX).
When Schumer says, ”We have to extend the housing tax credit” Cornyn says, “Chuck and I agree”.
Cornyn went on to make a plug for Senator Isakson’s (R.GA.) bill. This would expand the $8,000 tax credit to $15,000. It would also make it available to all comers. The existing bill is only for first time buyers.
While Cornyn is talking, Chuck is shaking his head, Yes, yes, yes.
Read the comments at zerohedge:
http://www.zerohedge.com/article/schumer-and-cornyn-we-agree-tax-credit#comments
Thank you! I don’t have a problem with extending the $8K for 6 months for first timers (about 1/3 qualify), but $15K for everyone is overboard and costs about 6x as much. I know politicians have to look like they’re doing something, so all I ask is that they choose the less expensive option.
I’m all for bread and circuses, just not ponies for all.
You can always count on politicians to do the wrong thing.
(Biting his tongue!)
This is just wrong wrong wrong.
Instead of wasting $$$ reinflating the housing bubble. Why not provide 15k to anyone that starts a company that hires 3 people for 6 months.
“Father, forgive them, for they do not know what they are doing”
Of course it will pass. The banksters are so incredibly desperate to keep their ponzi scheme going, or they’re dead.
They keep playing their silly little games, but they’re only delaying the inevitable.
awesome! If this passes, I’ll be buying a house 6mo after its expiration, cause the market will absolutely implode afterwards. Lets get ALL the people off the fence now, and get rid of all that demand up front so prices truly become affordable.
more waste of taxpayers dollars.When will taxpayers revolt?
Please no.
The fix for GI’s such that they don’t get hit with having to pay it back because of deployment is needed. Everything else? One can only hope that the drum of continuing op-ed pieces opposed to the continuation have some effect…
I think it’s great. Seems a good majority of people contributing their comments here are renters. I wish it was around when I bought my first home.
Owning a home is a powerful economic stimulus. Homes create jobs and demand for goods and services that will continue far after and beyond the tax credit. Any homeowner who wants to make improvements or needs to maintain their place knows what I’m talking about.
I guess it boils down to where do you want to see your taxes spent; on overpriced military weaponry, or, on people who live and work here in the US and in the process help end this brutal recession.
If the populace actually knew how harmful this is to the economy, and how it is nothing more than the RE industry getting its way again, they would march to Washington in protest, and burn NAR to the ground. Senator Isakson needs to be removed from office. He wants nothing more than to return to 2006 when his buddies were becoming stinking rich off of the horrific bubble. This has to stop.
I think there is also a strange naivete to this outrage. Politics is almost universally a means of obtaining financial advantage for insiders.
This news really shouldn’t surprise anybody. The more things change the more things stay the same. Let the market do its thing without useless intervention and all I wish is nice family worthy of home ownership to snatch up the available homes. Is that too much to ask? Apparently yes.
That said, I’m having a problem with renters that just moved in down the street. They (yes that is a generalization) just don’t bring value to the community. One weeks worth of papers are stacking up in the driveway, they park in the street and ignore the open spot in the driveway and there are four occupants each with their own car. Now, it is entirely possible to have the same problems with a home owner, but the chances are much less. I feel for the immediate neighbors. who now have to ‘fight’ for parking.
Yeah Mozart, blame it on politics one post after saying that bribing people to buy houses is better than buying weapons. Your lack of wisdom and self-awareness is remarkable.
Mozart,
As a buyer looking for a home – I’d prefer to see my taxes spent on things that don’t artificially & temporarily raise the prices on what I’m looking to purchase. Increasing prices by well over $15,000 and then offering me essentially a mail in rebate for less then the price increase stimulates nothing by my frustration.
The end result is if I purchase at the artificial price I’ll have less disposable income each month to spend on my house and other items. Go ask Home Depot, the local restaurants, the movie theater, grocery store, mall, etc if they want me to have more or less disposable income each month to potentially give them.
We do not need to stimulate demand for housing – it’s already there.
3clicks
Wouldn’t that be you are having problems with the landlord down the street? Whether they are an accidental landlord trying to cover as much of the note as possible by renting out to too many tenants or a speculator who’s using tenants to cover his interest only payments while hoping for appreciation soon, or a professional landlord who apparently is acting like a slumlord in that they aren’t policing their tenants or doing a sufficient job of screening applicants?
If you’re living in one of those places where the houses are too expensive to actually live in, eventually they all become weekly beach rentals, because that’s the only way anyone can afford to spend anytime living in them. At least that was my impression of Mission Beach for my first ever brief weekend in San Diego. (that would also be the limit of my first-hand knowledge of SD, and thus may not reflect wherever you live at all).
I guess it boils down to where do you want to see your taxes spent; on overpriced military weaponry, or, on people who live and work here in the US and in the process help end this brutal recession.
How about neither?
I wouldn’t bet against this passing. Just think of all of those poor suckers who jumped on the 8K credit this year they are going to miss out on a free 7K handout. I’m holding out until the rebate hits at least 30k. One way or another our fearless leaders will break the deflation cycle and reinflate/hyperinflate.
If the government wants to give me $15,000…I am just going to accept the money and move on with my life.
Really Mozart? Those are the choices? How about if the government spends our money on repairing infrastructure or adding more police? How about if the money is spent on improving our schools? Wouldn’t these help to create jobs, thereby increasing the potential buyer pool?
There is still no plan to deal with the underwater homedebtors. Re-inflating the housing bubble is not a solution and is most definitely unsustainable.
I was thinking this weekend that I’d like to see it become more difficult for certain investors to get into residential real estate. I don’t have a problem with someone purchasing a home as a rental property if that truly is their long-term intention, but I do see a problem with the short-term flip mentality. While it could be argued that the flippers stimulate the economy by fixing up their flips, it’s that sort of short-sightedness that lead to the situation we are in.
Welcome back Ronald.
My Dad’s name is Ronald.
As the longtimers know, my Dad had a debilitating stroke 3 years ago, and has been paralyzed since, though he’s sharp as a tack, and can speak well.
There are four siblings, three brothers and our little sis, who got married for the first time Saturday. Being the oldest, I walked her down the aisle while we had skype beaming the event back to my dad’s room.
Five minutes before starting my sister gives me her cell phone, says to put it on speaker phone, and to call my Dad’s room because the audio isn’t working on the skype.
We walk down the aisle with cell phone in hand, not knowing if it’s on or going to work. The priest says, “who gives this woman to be married today”, there’s a moment of silence, and then my Dad belts out “I DO” for the whole church to hear.
It brought down the house.
“I’m holding out until the rebate hits at least 30k. One way or another our fearless leaders will break the deflation cycle and reinflate/hyperinflate.”
The problem is reaching for that ring at the right moment. If you believe that the government will reinflate/hyperinflate, then you can bet on that by heavily leveraging to buy a house…
Jim,
That’s pretty neat
That is a sweet story Jim. I bet there wasn’t a dry eye…
Would they extend or lift the income restrictions on the tax credit as well so everyone can get a piece? First I miss out on my $600, then I miss out on my $8k? C’MON. I demand entitlements.
That’s an awesome story Jim.
Genius, I hate arbitrary rules like that but you know the whole point is to pay out as little as possible. They actually deserve credit for that – only 1/3 of people qualified. You don’t want entitlements, what you really want is equal treatment. Entitlements are simply loans taken out in your name by the government that you pay back through future taxes plus interest.
Unfortunately paying $15K to start a business and hire 3 people would be horribly abused. I know people who made an entire career abusing laws like that which already exist. It’s trivial to run a fake business which technically qualifies as a business, and to this day they were never caught. They’ve been trying to close loopholes for decades, not even a dent.
sdbri,
“Unfortunately paying $15K to start a business and hire 3 people would be horribly abused. I know people who made an entire career abusing laws like that which already exist. It’s trivial to run a fake business which technically qualifies as a business, and to this day they were never caught. They’ve been trying to close loopholes for decades, not even a dent.”
Pick your poison…
Give out tax dollars to underwater boomers. Or provide 3 jobs for 6 months. Either way abuse is going to happen, this is the government we’re talking about. I’d rather set a precedent that hard work = a reward than sending the message that the gov will help you out if you buy to much house.
“I’m holding out until the rebate hits at least 30k. One way or another our fearless leaders will break the deflation cycle and reinflate/hyperinflate.”
The problem is reaching for that ring at the right moment. If you believe that the government will reinflate/hyperinflate, then you can bet on that by heavily leveraging to buy a house…
I’m with you on this one Nate. I think the right decision is to take the 15k credit early next year and buy with bare minimum down payment. If our government fails to reinflate then it’s time to squat and then walk away like all the other deadbeats. The rules have changed. It’s a no lose bet unless you are concerned about your kids/grandkids having to pay for all of this nonsense
That was a beautiful wedding story. How sweet!
sdbri, I fully agree with what you’re saying, especially that the stimulus is actually a loan (well, for the people who qualify). Much of my post was half-joking. The more the gov’t throws at the housing market, the less likely it is that I will be buying a home anytime soon.
Someone mentioned spending tax dollars on schools. I like that idea.
shadash, my point is actually that people are not going to fake housing titles just to get $8K, whereas they have and they will fake businesses to get $15K. One is millions of times easier to fake than the other.
We can compare fairness and what makes sense, but this point is about abuse. The $8K housing credit is arbitrary and unfair and I’d prefer there to be no credit at all (and I qualified), but it’s not being abused through fraud. People who are legally qualified to get it will be getting it, unlike many business credits that create entire industries of fraud.
Genius, your point does stand that if only some people qualify for an entitlement – it’s a loan that gives them the money, but you have to repay.
About business credit fraud, jobs aren’t actually created under the scam. Social security tax will be paid, but that’s it. In fact, this dovetails nicely with other fraud where someone who evades taxes gets covered by a shell company that agrees to “pay” them. Two birds with one stone, thank you Uncle Sam.
P.S. You can get US Citizenship this way. It’s an industry.
JTR, great story about your sister’s wedding – Keep up the intellectually honest real estate debate.
Cheers,
Pigpen
I think the reason I’m against the tax credit, is that the tax credit now costs about $43,000 for every additional house it sold. This is a lot of money, but I do admit that all of the current stimuli have worked for the time being.
I do feel that an extension of the tax credit in size and scope at this point would result in fewer extra sales than what we saw the last year. That means that the tax credit per house sold ends up being much higher than it is now. If we start getting to 100K-200K per extra house sold, that’s a ton of cash that could be put to better use.
Kevin- if you are still following this. I appreciate your wisdom and self-awareness. To think I’ve been unwise and unaware. Lighten up!
Awesome story, Jim! It’s moments like that make life memorable.
Jim, since you’re a member of the club, can contact the higher ups and tell them to cut this crap out?
Jim,
That story brought tears to my eyes. How awesome for both your sister and dad.
BTW, I wonder what we could have done with all the bank bailout and housing stimulus money if we could have directed it toward energy independence and healthcare technology…
JtR – what a great experience for everyone at the wedding, especially for your sister and your father.
Some folks (understandably, I suppose) become very bitter after a stroke of the nature your father had. My grandmother had a stroke at age 88 that left her unable to swallow, so she could no longer eat, and had to feed herself through a tube piped into her stomach. She was also “sharp as a tack,” but wallowed in self-pity and became a miserable recluse her last few years on this planet.
Do you have a cell-phone communication link like that for seeing/talking with him every day?
Regarding the proposed $15K handout by feds, they are completely out of control, and this is because their constituents are completely out of control. The cash for clunkers mentality prevails. Too many people in this country have absolutely no idea about the “no free lunch” rule. Pump up the prices to kick (some of) the bank bail outs down the road. What a disaster this needless debt will be for generations to come.
Thanks Smithers.
My Mom is down there every day, so I call her cell phone.
My Dad said he got to watch the entire wedding, clear as day, with the skype connection. I should use it more often.
Maybe with the blog?