this is really dumb economic policy, and is the cause for the inefficient over-investment in housing:

Less developed countries have consistently higher levels of homeownership, while more advanced nations combine higher levels of economic development with substantially lower levels of homeownership. The US spends $46b on affordable housing, but $195b-$600b in subsidies to wealthy and middle class homeowners via tax deductions for mortgage interest or the non-taxation of imputed rent

the absurd housing fetish continues

I’m not sure I understand the proposal, but here is what the NYT says: The Senate voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15k, a provision championed by Republicans as addressing a root cause of the recession. Like Arnold Kling, I wish to shift the economy out of housing, not into it again. I also believe that the supply of homes is relatively elastic right now. The tax credit will subsidize the new buyers without propping up the price of homes. Demand will go up, supply will go up, price will stay more or less on the same trajectory, and banks won’t be any healthier. The subsidy goes to new home buyers and why should we be helping them above all others?

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