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Extending the $8000 First Time Home Buyers Tax Credit into 2010 is a Terrible Idea

By: Steve Johnson

10/29/2009 - 19 Comments

The $8000 Tax Credit is the primary reason that the housing market has begun to recover so quickly – too quickly.

This is perhaps the worst bill that congress has passed this year, next to cap-and-trade.

The Tax Credit gives away money to would be home buyers, but congress doesn’t have any money to give.  They do have the authority to allocate money and it’s up to the Treasury to find the money to pay for what they allocate it to.

For now, the money is borrowed from China by selling more U.S. Bonds and increasing the national deficit.  But the money will need to be collected from the working class taxpayers at some time in the future by a major increase in taxes. 

This is not monopoly money they are giving away.  We are obligated to pay this money back either by working harder or working for less money in the future (through a weakening dollar)

This is immoral and should be illegal to take away money from people that worked hard to get it and give it to people that haven’t worked for it.  By taking away the reward of hard work, we are reducing the productivity and wealth of the entire nation.   

This original bill which expires Nov. 30 has already helped create another housing bubble that will only lead to another housing market crash.

Congress is fully aware of the damage that this bill will cause as millions of homeowners will get crushed when the housing market crashes a second time from this bill. I hope they are held responsible for this disaster in the making.

But they don't seem to care as we approach the 2010 elections. They just want to juice the economy before the elections.  The bill is sponsored by the Democratic leadership because many of the Democrats are up for re-election, but the Republicans that support this bill are just an guilty.  

What better way to get re-elected then to hand out other peoples money?

This bill is a complete waste of money, which will not help the housing market in the long run but will lead the nation into a longer and deeper recession.

If congress would not have created for first housing market bubble with social policies that resulted in sub-prime lending standards, we would never have had a housing market crash.  Those policies were put into place for the same reason that this bill was created, to get re-elected.

Call it what you want, congress is not action in the best interest of the nation and that means we are all getting cheated. Our nation clearly needs new leadership that are fiscally responsible for the well being of the economy.

The difference between a good economist and a bad one has been said to be their ability to look past short term political gains in order to benefit the economy for the long term.  This is a perfect example of bad economists trading short term gains for long term economic stability.

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