Fear of Double Dip in Housing – WSJ.com

Posted by Jason | Posted in Government | Posted on 19-11-2009

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In case you missed it, yesterday, housing starts fell by 10.6%. Of course all the articles about it had some excuse, and how government was addressing it.

The U.S. housing market is sputtering again, adding to doubts about the vigor of the economic recovery.

Just a few months after housing showed signs of leveling off, bad weather and uncertainty over the extension of a home-buyer tax credit sent new-home starts in October tumbling 10.6% from the previous month. They fell to the lowest level since April, the Commerce Department said Wednesday. Starts of single-family houses fell 6.8%.

Earlier this month, Congress expanded the tax credit and extended it through April, so building should improve. Still, the latest data portend poorly for the economy overall, and for fourth-quarter …

via Fear of Double Dip in Housing – WSJ.com.

Is this idiotic or what? We created a bubble by pushing so called affordable housing with government policies and “free money” via the Fed. “Everyone should be a homeowner” was the slogan of the day. So, as the bubble is deflating, instead of letting it deflate naturally so we can quickly get past it, we are prolonging it. We don’t want the quick fast pain of a bursting bubble, so we spend money, which only prolongs and delays the bursting and leaves us further in debt as a nation.

The government is creating speculation by people making their decisions based on if and when the government is going to extent a tax credit. This is why you have speculators. The government is giving them something to speculate about. This blurb even says that now that the tax credit passed, building should improve. OK, so what happens when it expires? Do people stop building? Do we pass another tax credit? We just keep going further in debt as a country trying to minimize the pain of our past mistakes all the while making new mistakes.

Think about this on a personal level. While tax credits and policy seems very impersonal, what is taking place is government is taking by force our money in order to give it to people they want buying a home. Is this moral? Why shouldn’t you be able to keep your own money and decide what you want to do with it. Maybe you’d decide to buy a home if you had more money.

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Comments (2)

Wait until the full brunt of the commercial property bubble bursts after Christmas when thousands of retailers can no longer make their lease payments due to poor sales in a declining economy. As these store begin to close their doors there will obviously be another huge jump in unemployment also.

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Yeah, I think next year is going to be really bad.

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