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We Fought the Law…and the Law Won August 24, 2010

Posted by ev0rev in Politics.

As if we needed more proof, I submit this as exhibit Q in prosecution’s assertion that artificially propping up an industry does more harm than good.

While the homebuyer tax credit allowed some folks to purchase a home that otherwise may not have considered doing so (and therefore helping themselves as well as builders/contractors in the process) the net result is a lingering return to market correction.  In other words, it simply prolongs the effects of, in this case, an overvalued market.

Had there been no tax credit (and the expense burden placed upon us as taxpayers) and the market simply been allowed to follow the natural laws of supply and demand we would likely have seen a continued decline in home sales through July of last year but an increase once the market had bottomed out.  In this case, we created an artificial market and the false appearance of  an economy on the rise.

I’m not sure this will lead into a double dip recession…but I am positive it will prolong a recovery that has already taken much longer than necessary.



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