Monday, February 9, 2009

More on the $15,000 Homebuyer's Tax Credit: "Flip Your Brother's House"

Nobel Prize winner and Princeton Economics Professor Paul Krugman Op-Eds in today's NYT, harshing on the current version of the Stimulus Plan, President Obama's approach, and the $15K homebuyer's tax credit:

What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

A proud centrist.
...[T]he centrists were apparently just fine with one of the worst provisions in the Senate bill, a tax credit for home buyers. Dean Baker of the Center for Economic Policy Research calls this the “flip your house to your brother” provision: it will cost a lot of money while doing nothing to help the economy.

The Senate still hasn't voted upon this bill; this credit may not make it into the final version. Read Mr. Krugman's entire piece here. Our original post explaining the credit, and containing other links, is here.

2 comments:

Mark said...

Just got around to reading my 23 January issue of Fortune and there was a gem of a quote from Peter Schiff in there:

"'I'm as negative as I've ever been,' he says, 'because everything the government is doing now is going to make the situation much, much worse. They're trying to reflate this bubble.'"

Or keep it inflated. Government got us into this mess; it is not going to get us out. People will tell you the way to avoid a hangover is to keep drinking, but eventually you have to pay for your overindulgence. Why We the People think it's our God-given right to transcend the economic cycle is beyond me, but right now we're only making it worse. This idiotic tax credit for those with $600k homes and $135k annual incomes is a perfect example.

It's truly a bipartisan effort, too: the Bush Administration's actions in Nov-Dec were stupid and the Obama's Administrations actions in Jan-Feb are equally stupid.

Full text at http://money.cnn.com/2009/01/20/magazines/fortune/okeefe_schiff.fortune/index.htm?postversion=2009012310

Krugman's piece is laced with ideological untruths. "Essential state services"? Come on, there's some fat in state budgets that can be trimmed. California closes its DMVs every other Friday, for example.

It just takes creativity, but we unfortunately don't elect creative people. We elect good speakers and ideologues who promise us a bigger slice of the government pie. The creative people wind up in the private sector. You truly get the government you deserve.

Real C'ville - The Bubble Blog said...

TY for the link. Krugman may not be your ideological favorite (to put it mildly), but he IS opposed to this tax credit, though obv. for different reasons.

There's also a proposed tax credit for Homebuilders profits/losses over the PAST FIVE YEARS. More on this if it passes/gets written into law.