Please stop this zombie behavior. Government doesn't create wealth, it devours it like a zombie devours all that is living. Do you know what happens to zombies? They devour everything living until there is nothing living anymore....then they die, too.
Government home buyer tax-credits are bribes. They're bribes to get unwilling and unsophisticated home buyers to purchase assets which may be artificially inflated. Haven't we learned enough from the mistakes of Government's social engineering in the mortgage markets? The social engineering associated with the Community Reinvestment Act inflated a real estate bubble which popped and ruined families' opportunity to create a reliable nest-egg from equity in their homes. It started off slowly and accelerated when expanded to encompass most any sub-prime loan. The Government-provided backstop for losses encouraged market participants (banks and non-depository lenders) to make mortgage loans with complete disregard for the borrowers' abilites to repay those loans.
Government intervention to entice asset purchases creates a pyramid scheme which ultimately leaves someone holding the bag. Like Bernard Madoff did with unsuspecting investors, the National Association of REALTORs attempts to start a new Ponzi scheme based upon a Government incentive. Someone's gonna get left holding the bag for this scheme; most likely our children.
We are in the midst of the largest "right pricing correction" of our lifetimes. The existing housing decline, driven by the failure of the unsustainable, poor lending practices (foreclosures) is healthy. Free markets reward prudent use of leverage and punish the irresponsible. Many people trusted mortgage consultants and real estate agents to advise them to eschew bad business practices and make prudent purchase decisions. Instead, we nursed on the milky teat of a Government-sponsored Ponzi scheme destined to fail.
Fail is what the extended tax credit will do. The initial first-time home buyer tax credit was an interest-free, loan from the US Treasury. While still immoral, it provided for the repayment of that loan to the Treasury. We descended down the slippery slope of "jump starts", expanded the size of the credit, and forgave the repayment of those "loans" with the sole purpose of giving the housing INDUSTRY, not housing market, a boost.
To request further Government assistance for our industry is deplorable. We need a housing market that relies on the principles of supply and demand rather than some cheap, two-bit hustle. More foreclosures are coming and that will be tragic for millions of American families. One man's tragedy, however, is another man's opportunity. If we, as real estate agents and loan originators are to support the principles of private property ownership, free markets, and real estate as a reliable vehicle to build long-term security, we MUST do what is moral, regardless if it won't allow us to line our pockets.
Please say, "No Zombies! I won't allow you to devour my children's flesh" and encourage your elected reprsentatives to act like sober, prudent people...
...not zombie enablers.
PS: If you're a first-time home buyer, by all means take the tax credit but make no mistake about it, this credit REALLY wasn't for you, it was for us, the zombies in the housing industry.
Why Devouring Flesh Is Morally Wrong (and how you can stop doing it)
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Thank you for your post, Brian!