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!”