Housing Stimulus

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Let me propose another stimulus plan. I believe that the proximate cause of the economic downturn was the housing market bubble, and regardless who was at fault that segment of the economy needs a boost.

The reason it needs a boost has less to do with any accompanying industry (real estate, construction, lending) than it does with basic economic confidence – people’s wealth is largely in their homes, and when that wealth diminishes they delay spending.

IF that analysis is correct, the natural demographic cycle needs to be jump-started. The government should buy terribly distressed homes in, for example but not limited to Detroit where homes go for as low as $10,000, as a supply of low-income homes.

(This plan does not address foreclosed homes, or short-sale homes because those Sellers have no ability to purchase other homes. It is designed to boost sales among those who can, and wish to sell and buy elsewhere but in this market have no hope for a sale to start the process. There are many.)

Those sales should be dependent upon the Sellers purchase of another home anywhere in the United States, with escrows to close simultaneously. At some point, the plan will generate movement in the market and once the market starts it is self0sustaining, hopefully without the market distortions that brought about our housing crash.

I understand the objection will be that it will continue to concentrate the low-income people into low-income neighborhoods in low-income areas, but mine is an economic stimulus plan, not a social engineering plan.

“Nobody gets it if there ain’t any!”

Economic Stimulus

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If the federal government wishes to stimulate the economy, it could do it much more easily by simply giving everyone a “Geithner Tax Holiday” – simply leave everyone with no tax for last year.

That would stimulate the heck out of the economy, and take the pressure off those who have lost their job, or whose job is endangered. People like me are spending like mad already, and I would do more if I had more.

The loss of income to the government approximates the amount that they will spend trying to stimulate the economy, but place the money at the working end, not the executive end of the economy.

The disadvantage of my proposal is that it does not comport with social engineering, does not redistribute wealth except naturally, does not employ more government workers…all it does is leave individuals and sub-chapter S individuals with MONEY THEY HAVE ALREADY EARNED.

(But it would stimulate the economy, which I thought was the plan.)