OK. Take a deep breath. The Home Buyer Tax Credit extension has expired. Now what?
Many Realtors (and our association) argued vehemently that the tax credit was crucial to the housing recovery. My contention is that the housing tax credit was a huge waste of money and did not come close to offering the gain in the housing market that it should have for what was spent. Moreover, we can't afford it.
Consider the following chart from the congressional budget office. Notice that 60% of our tax dollars pay for three programs.
60% of the money we spend goes to three things: 1) National Defense, 2) Social Security, and 3) Medicaid, Medicare, and CHIP.
What this chart does not tell you is that we are only collecting enough taxes to pay for 60% of the things the government spends money on. In other words, we only collect enough tax money for the 3 things listed above. Every other dollar we spend is borrowed from other nations, and to a lesser degree, private investors.
Imagine what would happen to your family if you put 40% of your monthly expenses on your credit card. That's precisely what our nation is doing. We are borrowing trillions each year to pay for these "Cash for "Clunker ," and "Home Buyer Tax Credits."
I would say that you and I are paying for folks to get new houses and new cars, but in actuality, the Chinese are paying for it, and you and I are just paying the interest on the loans they lend us to run these programs.
I'd be interested to hear your thoughts.
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