According to CNNMoney.com, the State of California is blowing through the $100 million that they set aside to be used as $10,000 tax credits for new home sales.

Since its inception in March, over $80 million of the $100 million has been "spoken" for.  It was supposed to last through March of 2010.

The credit is only available for new homes but any primary residence buyer can qualify for it, not just first time home buyers.  Additionally, contrary to Obama's housing plan, there are no restrictions on the buyer's income - what a novel idea.

And while I can hear the chorus of critics saying that California is broke and that they should not be spending this money, I would argue just the contrary.  California needs to invest this money into their economy.  It is the housing market, stupid.

Not only will this housing stimulus plan help to increase demand for real estate and stabilize home prices.  It will also help to stabilize local banks balance sheets.  Additionally, jobs will be created.  And finally, something that I wrote about in September of 2008 in the It's The Housing Market, Stupid book, tax revenues will be generated for local municipalities.

Tim Coyle, a senior VP with the California Building Industry Association claims that, "Every time you build a home in California, you're generating $16,000 in taxes".

While California has budget woes, they clearly understand the significant role that housing will play in helping their state's economy recover.