GA Senator Isakson - his housing legislation tampers with the free market

Posted by Jeff Aughey on Wednesday, February 4th, 2009 at 9:09pm.

johnny-isaksonIt appears Georgia Senator Johnny Isakson does not believe in free markets and limited government.  I read few news articles about the housing proposal that he is trying to push into the latest stimulus bill at a cost of $20 billion dollars.  To quote a recent article: "Specifically, Isakson’s Fix Housing First Homebuyer Tax Credit legislation would also enhance the existing homebuyer tax credit by:
  • Extending the eligibility period for the credit to December 31, 2009;
  • Increasing the credit amount to 10 percent  of the home price capped at 3.5 percent of FHA loan limits (geographically dependent) – ranging between approximately $10,000 and $22,000;
  • “Monetizing” the credit so it is available at time of closing; and
  • Allowing the credit to be used in conjunction with mortgages financed by state or local bonds."
I read the full article and I bet he is right, it would spur some activity in the housing market but at what cost? Not only does it cost $20 billion but what happens to the market as soon as the incentive runs out in 11 months?  I guess sales and prices will slide back again using the same logic he uses to support his ill conceived proposal. Why only $20 billion? The government has been printing and spending so much money lately, why not double the effect? Or heck, why not five times the effect at a cost of only $100 billion (which is less than the cost of the AIG bailout) and extend it to all home purchases and not just first time buyers? Or maybe the government should just offer loans at a 4.0% interest rate (a non-Isakson proposal being floated around Washington).  That would increase activity and home prices as well.  Shaazam, they could just lower the rate to 2% and really get things moving.  But wait, wasn't it cheap money and easy credit that got us into this mess? So let me make sure I understand this right, the government's solution to the problem they helped create is to pass legislation that feeds the very environment that got us into this mess.  Brilliant. Just because Senator Isakson is familiar with the real estate industry does not mean his ideas are good for the economy.  It is way past time for the government to keep its hands off the economy and to stop distorting the market. GOVERMENT INTERVENTION IS NOT THE ANSWER, IT IS THE PROBLEM!  Sorry for screaming but I am sick and tired of the craziness that comes out of Washington on a non-stop basis. Ok, I feel better now.  All the best,  Jeff

2 Responses to "GA Senator Isakson - his housing legislation tampers with the free market"

James Searcy wrote: Thanks for speaking up on that Jeff and I see where you're coming from. I too am leery of the government playing the savior. I agree that it's best to offer a passive incentive (like extra low interest rates) that would spur me like me (and maybe you) to RUN, not walk to refinance our homes. The other thing they can do is eliminate the excess "pork" that clutter legislation that is supposed to be helping the American people - AND to hire a million of honest watchdogs to eliminate the stealing in our federal government, especially in D.C.

Posted on Thursday, February 5th, 2009 at 10:49pm.

Jeff Aughey wrote: Hi James. Thanks for stopping by and taking time to comment. I am with you on the elimination of pork in the spending bill that is currently working its way through congress. It is great to know that there are good folks like you out there that also think our government is over reaching. All the best and hope to see you here again. Jeff

Posted on Thursday, February 5th, 2009 at 11:28pm.

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