by Dean Baker; Co-Director of the Center for Economic and Policy Research
The reporters covering the stimulus have been so busy editorializing against it that they haven't had time to pay attention to what Congress is doing. Last night Congress approved the Isakson amendment which gives $15,000 (or 10 percent of the purchase price, whichever is lower) to every person who buys a home in 2009.
Somehow, Isakson puts the cost of his tax break at just $19 billion. Let's break the Washington rules and try a little arithmetic. Even with weakness in the housing market, it is still virtually certain that we will sell close to 5 million homes in 2009. The overwhelming majority would qualify for the full credit. So, we get 5 million times $15,000. That sounds a lot like $75 billion.
... the rest after the click.
My comment: I wonder what mommy and daddy had in mind when they underwrote all those J-School degrees.
Get more details in the New York Times.
In my opinion, this measure will actually have a chance to do some good. It's based on "trickle up" economics and the stimulus is aimed at actual people rather than economic "middle men" such as banks, insurance companies and brokerages in the hope that the benefits would "trickle down".
$75bn is nowhere near enough ... but it's a step in the right direction. And as they say, the longest journey begins with the first step.
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