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Show ALL Forums  > California  > Housing tax credit costing more than it help.      Home login  
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 kittybiscuit
Joined: 2/11/2007
Msg: 16
Housing tax credit costing more than it help. Page 2 of 2    (1, 2)
I just bought my house in July. I can tell you the only things on the Socal market are foreclosures and short-sales, many of which are in poor condition. I would like to see the numbers for certain regions to see the impact.

Also, the math doesn't "work" out in many things we are taxed for. The whole tax credit was to get people into the market earlier or push them over the edge into buying to help boost up the home sales. According to the real estate numbers in the last month, it did have an effect as the phase out date neared, the sales dropped. Whether you agree with it or not, it is a bit more complex than deadbeats sucking on the government teat.

Also, the loans for FHA have tightened up to the point where even the banks are getting hesitant to sell on FHA loans. Mine is an FHA, and I am far from a deadbeat. Now these people taking out multiple loans? I seriously question their sanity. Chances are they do have poor credit and cannot qualify for an FHA or traditional loan.
 sd_matt
Joined: 7/9/2006
Msg: 17
Housing tax credit costing more than it help.
Posted: 11/10/2009 2:12:38 PM
Mermaid

I think we should teach them by voting out all those that voted for the bailout.

Elmenreich

Doctorhousingbubble and Piggington have used the article I posted and it was rarely debated in those blogs. Theses two blogs have been very accurate on the mechanics of the bubble. So I am inclined to trust their assessment more than yours. Also I see Brookings being used across the left and right.

But

If you can point out what is specifically wrong with the methodology of the article I am all all ears. And no I'm not trying to pick a fight.

 Elmenreich
Joined: 9/23/2009
Msg: 18
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Housing tax credit costing more than it help.
Posted: 11/10/2009 4:43:03 PM

If you can point out what is specifically wrong with the methodology of the article I am all all ears. And no I'm not trying to pick a fight.


I already did on the last page. There's a link on the last page. Let me repost it:


Beck got his number from someone who learned about a guesstimate of what the auction value of permits might be (way higher than current estimates, by the way), divided by the number of households, and proclaimed this the cost of the bill. In effect, he looked at a guess about the size of the blue rectangle, which does not represent an economic cost, and called that the cost to the economy.

In a way, though, what Martin Feldstein did was worse. He took the CBO’s estimate of “compliance costs”, which was $1600 per household in an early report (it’s now down to $900, but who’s counting?), and implied that this was the economic cost of the legislation. But “compliance costs” are basically the sum of the blue rectangle and the red triangle; the true economic costs are just the triangle, and are much smaller.

Another way to say this is that under the Feldstein method, any time you try to correct an externality, which necessarily means changing relative prices, all of the negative effects of the price change will be counted as a cost — but none of the positive effects will be counted as a benefit.

Bad stuff. And what you should bear in mind is that all I’m doing here is conventional neoclassical economics, quite literally basic textbook material. What does it say when the people who claim to believe in this stuff throw it out the window as soon as it leads to policy conclusions they don’t like?
 sd_matt
Joined: 7/9/2006
Msg: 19
Housing tax credit costing more than it help.
Posted: 11/10/2009 5:06:06 PM
Yeah post the link please. I'll read it.

The NAR's estimate (no doubt an optimistic one) doesn't exactly indicate an efficient use of taxpayer money.

So for now I stick to my original premise.
 Elmenreich
Joined: 9/23/2009
Msg: 20
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Housing tax credit costing more than it help.
Posted: 11/10/2009 5:07:54 PM
Why didn't you just read the part I copied above? Did you not see it? Anyway, the link's on the last page.
 sd_matt
Joined: 7/9/2006
Msg: 21
Housing tax credit costing more than it help.
Posted: 11/10/2009 5:53:21 PM
Yeah I read what you copied and I see what you are saying about where he got the estimates. The only links I see are what Husker put up.

So what would be the best guestimate of future sales? Case Schiller?
 Elmenreich
Joined: 9/23/2009
Msg: 22
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Housing tax credit costing more than it help.
Posted: 11/10/2009 6:00:37 PM
There's no way to guess what future sales are going to be. It's silly to put up any numbers.
 sd_matt
Joined: 7/9/2006
Msg: 23
Housing tax credit costing more than it help.
Posted: 11/10/2009 6:13:23 PM
Either way it is bad policy. It only delays the unavoidable.
 Elmenreich
Joined: 9/23/2009
Msg: 24
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Housing tax credit costing more than it help.
Posted: 11/10/2009 6:24:41 PM
That's not clear. Most economic models show that stimulating the economy provides lasting relief instead of "delaying the unavoidable."
 sd_matt
Joined: 7/9/2006
Msg: 25
Housing tax credit costing more than it help.
Posted: 11/10/2009 6:50:08 PM
LOL. We shall see.

Where does your model come from? The NAR?
 Elmenreich
Joined: 9/23/2009
Msg: 26
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Housing tax credit costing more than it help.
Posted: 11/10/2009 7:20:42 PM

LOL. We shall see.

Where does your model come from? The NAR?


John Maynard Keynes modeled stimulus packages to fight recession and depression in the 1930s, and America has had a stimulus plan for five of the last seven recessions, starting in 1965. Stabilization policy is part of every modern nation.

Generally, the faster the stimulus money has gone out, the quicker the end to the recession has been. The stimulus plans of 1964, 1971 and 1975 didn't pan out so well because they weren't enacted in a timely fashion, but in 1981 and 2001, quick stimulus packages spurred recovery. In fact, many economists blamed the recession a few years after the 1987 stock market crash on lack of government intervention.
 sd_matt
Joined: 7/9/2006
Msg: 27
Housing tax credit costing more than it help.
Posted: 11/10/2009 9:40:49 PM
Keynes has as many critics as he does supporters.
I am more inclined to listen to those who were predicting this collapse 2003 and earlier. Dean Baker, Nouriel Roubini, Peter Schiff ect... and seeing what they say in common. That is a more common sense approach.
 MermaidSari
Joined: 2/4/2007
Msg: 28
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Housing tax credit costing more than it help.
Posted: 11/11/2009 7:20:43 AM
Our government itself has reported shortages in expectations in their socialist efforts and over spending of deficit/tax dollars. The problem we see coming is inflation (along side that ever shrinking USD) and interest rates at an all time low that have only one way to go. So why is it believed that bail outs and government buy-outs and hand-outs will cure what philosophically is quite simple.

Socialism didn't work in Russia or Germany. China is thriving on sweat factories and child labor and the use of inferior material in production. If our work day is considered long - consider China's.

When looking into political philosophies it always amazes me that the simple truth is overlooked if 'caring' or 'compassion' is stated to be the bases of socialist tactics.

We now have a nation where the gov. owns banks and with this 'real estate.' This, during a recession where joblessness is higher than average and the American dream is bent on borrowing versus owning.

Will the next generation fair better with the debt they have to pay down?
 sd_matt
Joined: 7/9/2006
Msg: 29
Housing tax credit costing more than it help.
Posted: 11/14/2009 7:08:59 PM
I think the sheeple will get slightly smarter for a generation or two then go back to the status quo.

I have nothing to back this except my gut.
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