How the stimulus bill will hurt the housing market
Article written by Justin Tibble
The idea that the government can support a certain way that when housing prices grossly inflated, partly because the government? s participation in the housing market in the first place boggles my mind and leaves many questions unanswered. Be the first is how can we pay for all this new spending and what happens when all this printing of money causes run away inflation, which will have a direct negative impact on the housing market, the Fed has to raise interest rates in order to control inflation. Higher interest rates increase unemployment because employers can? T get lines of credit at affordable prices to meet payroll and other obligations of the short-term debt. This is a very real threat that this administration have failed to address and for good reason. Because the reality is that ;???? Doesn t matter what steps to take to repair? housing market, all attempts to try to reverse the market will do more harm than good, and many politicians on both sides of the aisle know it. But they feel the urge to take action, even if? S will do more harm than good for nothing but to give the impression that? Care?, But in reality all they really care about being reelected.
The most intelligent of our policy? S is inaction, stop trying to be the hero? S you? No? Re make things much worse than necessary. All that bad debt has to clean the system, then markets can be corrected. If the market correction? S means that some companies and people lose their homes, where it goes, so be it. It’s a hell of a lot better than the alternative. Failure is not the end, but rather from new SA for a new beginning?. But oh no, right? T sit and do nothing, it would be politically unacceptable. So what they do, they pump large amounts of money in our projects as well as animals giving billions more to banks, all in the name of saving the economy. But as we saw with the first 350 million dollars? T do not go as planned, would have been expected given the situation. Instead the banks took the money and accumulated to consolidate their own finances and to acquire other banks. He did nothing to increase demand for housing as sales figures, he said. If I, as an individual hemorrhaging money to the point where I’m close to being insolvent, do you think I’m going to do the same thing that helped me in this predicament in the first place. Hence the reason why the banks decided to play it safe, keeping the money rather than lend. Note that it is all orchestrated by the same people who help us in this mess in the first place. Here are the facts as we know it. President Obama wants to cut the deficit in half by the year 2013. Sixty-eight percent of small business owners with Obama? tax plan will end up paying more taxes. Seventy percent of all workers in this country are employed by small businesses. Even if you were going to confiscate all the money earned by the people who make 000 or more, there are still isn? Enough to cover the cost of new spending that has been proposed so far by this administration T. As the figures show? S mathematically impossible to reduce the deficit in half as the President intends to do so without significantly increasing taxes on small businesses and middle class. As most people already know, raising taxes deprives the private sector the necessary capital, which is growing and creating jobs, assuming that the economy is healthy. But we all know that this n? T the case at all, so it now becomes a matter of being able to hold more capital in the private sector as a way to stop the bleeding, rather than to expand and increase the number of employees. If anyone has any questions? S that rising unemployment will lead to a further decline in home values, just take a look at the state of Michigan. No matter where you may stand on the political spectrum, something we can all agree on the new administrations of n numbers? t add. The key is that the federal government has proposed new spending much through it? Stimulus? The bill? s almost impossible for hyperinflation does not occur in the next ten years, as history has shown us. The Federal Reserve will have no choice but to raise the lowest interest rates put downward pressure on housing prices causing decreased demand due to higher monthly payments. The federal government will be forced to cut spending that will lead to a decrease in the amount of money goes to states to pay? Essential? services, forcing state governments to raise property taxes (at least until people rebel), even if property values continue to fall. Raise taxes on small businesses will increase demand for housing resulting unemployment in the fall. As employment increasingly difficult to find, people will be forced to choose a job that pays less to reduce their ability to buy homes at higher prices. People who are employed have lost their ability to bargain collectively for any increase in real wages or benefits (yes, even the big unions, look at the UAW). Real wages continue to decline the dollar’s purchasing power remains as hyperinflation eroded set, have a major negative impact on living standards in the country. The scholarship will continue to decline in the fall of corporate profits and corporate tax rates rise, another factor contributing to the decline in property values because people have less money to make a down payment, a practice has remerge in recent months, banks try to protect against future losses. Americans, no doubt, see a significant drop in living standards over the next ten years, falling housing prices are just the tip of the iceberg. Don? T get me wrong, something good will come of this stimulus bill later in the form of necessary improvements and construction, but long-term negative consequences will weigh the benefits far below the long term.
Capitalism without failure is like life without risk impossible. Imagine life without risk, they would all be driving 110 mph regardless of our own safety or someone else? S for this, because we would all be immortal, without worrying about the world. In essence, this is exactly what happened in the secondary mortgage market. These banks have been around to act as an immortal, passing the risk that the federal government through Fannie Mae and Freddie Mac Our Governments? policy? too big to fail? created banking immortals with the support of us U.S. taxpayers, who ultimately will be those who will die of hyperinflation, as a direct result of our governments irresponsible and reckless actions. Farewell to capitalism, right? LL greatly missed by many, thanks for the memories.
About the Author
bought my first investment property at age 20 while in Port Hueneme, California and has invested in real estate since then. Three years ago I decided to get my license to sell real estate. Now co-owner and operator of Reozom.com, one funded by advertising For Sale by Owner (FSBO) site.
Posted in 
Tags: 
