A modest proposal to stimulate the housing market
It's bail out time again, with the housing market in a nose dive.
So forget about pesky little pump primers like the home buyer tax credit - let's start thinking really big here.
Along those lines, I got a kick out of this tongue-in-cheek proposal from gcbma, a blog regular, that he claims will both save the housing market and the economy at the same time.
An honest to God twofer if there ever was one.
It's modeled on cash for clunkers, which, as well all know, has made the American auto industry the envy of the world once again - well maybe the Third World, but who's counting.
As you recall, that visionary government stimulus program doled out cash for consumers to trade in their old gas guzzlers for scrap and buy brand new fuel efficient Japanese cars.
Well how about cash for fixer-uppers. You agree to buy a new, energy efficient home. Then Uncle Sam will give you cash for your old, carbon belching hut and bulldoze it!
It harks back to one of the proudest moments of economic development in American history - urban renewal - when the government had the guts to start bulldozing older, inefficient commercial and residential buildings left over from the 19th century.
I mean, what is there not to admire about the glittering glory of Charles River Park, which stands proudly atop the once derelict West End, or all those neat and orderly 1950s era surface parking lots that replaced ugly old storefronts and apartment blocks in industrial towns like Haverhill?
Well this will be urban renewal the way it should have been done if it weren't for all those selfish preservationists and general, all-around complainers. We can say bye, bye to all those greedy, energy hogs out there, from post-war ranches, capes and colonials to hopelessly outdated Victorians.
Just think what this will mean for the planet!
Anyway, without any further buildup, here's gcbma's proposal for saving the housing market as we know it.
"If you really want to drive up house prices, here's a modest proposal, patterned on the "successful" of the Cash for Clunkers program. For those with no mortgages, the Fed offers to buy your old house at some low fixed price if you buy a newer, more efficient one; the Fed then bulldozes your old house, thereby permanently reducing supply. Home prices are permanently increased, instead of temporarily inflated. As a windfall, unemployment is reduced, because of the need to build new houses, solving a big problem in the economy. If prices get too high for people to afford, we just raise the income levels of the subsidy program, and Uncle Sam (er, uh, your tax-paying friends, neighbors, and co-workers) will pick up the tab."
Of course, it's all in great fun. But as the housing market and the economy get funkier by the day, who knows what may come out of Washington?
