This past Tuesday, the Senate’s version of the big stimulus bill included a tax credit for homebuyers of 10% of the home value, up to $15,000.
Now the thing is, I’m not trying to give any commentary on the justification for hundreds of billions of dollars of government spending. Certainly, if GNP = government spending + consumer spending + net exports + investment made by industry, an increase in government spending does raise GNP (and the hope is it provides some kind of multiplier effect across the other three terms). But if the sheer scope of it sounds like an irresponsible way for government to act, I do share your concern.
But that’s not the point I want to make. The point is, the tax code and the whole financial system is like a game. The rules of the game frequently change. And when the government tries to redistribute wealth, even if it’s a bad idea, I like to try and see if I can be on the side that’s being distributed to. I changed careers because I love this sort of thing.
So on Tuesday, I had a plan. Like every other rational-minded person who doesn’t turn down $15,000, I would move sometime in the next year. Even if it was just across the street. I envisioned the Great American Home Shuffle. As silly as it sounds, it would get money flowing around in the industries that are suffering the most. Of course, I would need to look into how the credit affected AMT, and make sure that realtor commissions and closing costs still put me out ahead, but it was a pretty solid plan.
And then on Wednesday (was that really just the next day? I think I liked it better when I thought that government was slow to act) the House and Senate had to get together and iron out their differences.
The $15,000 homebuyers credit appears to have been one of pieces that didn’t make it. 🙁
Gee, thanks a lot. The biggest long-term challenge to any kind of economic recovery is that Americans don’t spend like they used to. With credit locked up and people having a lot less money to draw on, we’re becoming a nation of savers. So the consumer spending part of of the equation (the biggest term by far) has diminished substantially. And even though I didn’t have it in the first place, it feels a lot like the government just took $15,000 away from me. Which sort of has an anti-stimulating effect, if you think about it.
So it looks like the House of Gjertsen is staying right where it is.
Oh drat. I was thinking that as far as I was concerned, that $15k was the only stimulating thing about the plan. As if there weren’t enough truly UNstimulating things to remove.
(off to stuff some more cash under the mattress…)