Feds looking to repeat repeat of failed housing policy
One of my favorite things about idioms is that they often contradict each other. Does absence make the heart grow fonder or does out of sight mean out of mind as well?
With news breaking today that the feds are considering creating a third homebuyer tax credit program, it’s the battle of two idioms: “If at first you don’t succeed, try, try, try again” vs. “Those who don’t learn from their mistakes are bound to repeat them.
Shaun Donovan, Secretary of Housing and Urban Development, said Sunday the housing market’s July woes were “worse than expected” and the administration might support a new homebuyer tax credit.
In an interview on CNN, Donovan said the administration is “concerned” about the path of the industry. He defended the Obama administration’s record on supporting the housing market, amid new signs the market is struggling alongside the broader economy.
Donovan did not rule out a further homebuyer tax credit to support the market. Congress passed a homebuyer tax credit to support first-time buyers. The credit has now expired.
In this case, the winner is “Those who don’t learn from their mistakes are bound to repeat them.” The previous housing tax credit programs cost taxpayers a bundle while simply shifting housing demand forward. Once the tax credits ended,
demand plummeted, because the government had paid buyers to purchase homes sooner. The tax credits didn’t create demand; they simply created a miniature bubble that has since burst. The same thing happened in the Cash for Clunkers tax credit program.
Just another example of why government shouldn’t be picking the winners and losers in the economy.