"We're from the Government and We've Come to Help Housing."

The recent $26 billion government housing program with a $8,000 home buyer credit was intended to get housing back on track and put a floor under home prices.

The great $26 billion real estate swindle is subtitled "Pity anyone who took the tax credit to buy a house." Here's an excerpt from the article:

"But as foreclosures surge again and house prices continue to slide, new data out Monday reveals more of the grim verdict on the $26 billion federal program in 2009 and 2010 to offer tax credits to home buyers.

You may remember that between the spring of 2009 and September 2010 the government handed out credits of up to $8,000 to induce people to buy a new home. It was supposed to gee up the housing market.

How’d that work out?

Zillow.com, the real estate information company, says the average price of an American home fell again last month to $171,500 — the lowest level in eight years. That’s down 4.4% from a year ago, although it’s been about stable over the summer.

Now compare the average prices with those that people paid in 2009 and 2010, when they took advantage of the credits.

According to Zillow, prices during that time averaged about $186,000.

In other words, based at least on average prices, you’ve lost about $14,500 — nearly twice the value of the credit."

Thus, the politicians once again tried to solve a long term problem with a short range government spending program. The plan worked just like all the other short term efforts. It spent taxpayer money, increased the national debt and as with other plans like cash for clunkers, the new proposed jobs plan and countless other ineffective but expensive attempts to get the economy moving again and put people back to work--accomplished nothing worthwhile.

Ineffective albeit perhaps well intentioned schemes by politicians spending OPM unwisely won't make our financial problems go away. In fact, this "targeted and temporary" government stimulus wasteful spending disguised as investment will only make things worse. For that we have lots of hard evidence.

That said, these "targeted and temporary" wasteful expenditures may help the politicians win reelection next year. In the meantime, it's going to be an expensive campaign season for taxpayers with no good coming from this ongoing opportunistic political short termism.

We need long term solutions for our long term problems. Lower tax rates and less government waste and spending, aka "investment," are what's needed. And the lapse of time.

Otherwise our financial problems along with the size of government will continue to grow--at the expense of the private sector.

I hope we don't have to wait to address our problems until we can borrow no more. That's so unnecessary.

Thanks. Bob.