No not a completely stupid idea but very poorly thought out. I bet most of you don't remember Bush sr's push (and the goes for the tax man Gris) but instead of flat out offering an $8k tax deduction, Bush sr was pushing for allowing new home buyers to use their 401k investment (up to 10k, it may have been more) to buy a home with no penalty for early withdraw. That is a much better plan that encourages more committment to individual responsibility and to corporations to develope a 401k retirement policy. Today we have a program run by the government with a lot of abuse and no real commitment on anyone's part. It amounts to people in DC handing out cash again to people who shouldn't get it.
I'm sure the Dems on hear will say it's flawed and the fickle's will say whatever. The conservatives who are too young to remember will think about it.
__________________
John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
I guess I would say that I disagree with you. Why would I rather have people invade their 401K accounts? What about those who don't have a 401K or don't have sufficient funds in their 401Ks to get this benefit? You can argue that this takes the costs off the government books, but I'm not persuaded.
On the other hand, the prior question is what is the purpose of this program in the first place? Is it to encourage home ownership, as home ownership is deemed good for the society? I allow that there is some rationale for that (this is, after all, the rationale for a home mortgage interest deduction, isn't it?), but isn't it possible that this may tend to get some people into houses they can't otherwise afford? Been there, done that. Ouch! Perhaps the purpose of the program is different, maybe it is to encourage the sale of homes to flush the toxic mortgage assets out of the system? I'm not sure that this measure accomplishes that purpose. It is possible that this is just an $8,000 give away with no good accrueing to the public at large, beyond the first time home buyer?
Before I would be able to either strongly support or strongly oppose this program I would want to have a clear understanding of the basic purpose or objective of the program. I'm not clear on that at this time.
Location: On an Island in the west coast of New England
Posts: 13,133
I bought my first house in 1970. I hope the 8 grand tax credit goes back that far. Now to be serious. I wonder what happens when all the ink they use to print money runs dry. Money spent by our government is like water over the falls. It just keeps coming. Give away money then raise taxes to pay for it.
__________________
Too busy with fishing to spend much time here.
Last edited by Champlain Islander; 11-06-2009 at 04:41 AM.
I do not have a problem with one using a portion of their 401 toward the purchase of a home or education. I would being willing to guess that the ones that recieved monies from Fannie and Freddie for home purchases were not into an employee program for retirement, either their employer did not offer it or they chose not to participate. I would have to imagine that the subsidized monies offered by both Fannie and Freddie ponied up better then any 10k of a 401k. I have known fellow employees that opted not to participate into retirement programs, even at a dollar for dollar match for various reasons, yet these were generally the ones that showed up to work in Vettes and Caddys. They are also the ones that flutter around the overtime book like moths around a lightbulb. I am not well versed concerning Fannie and Freddie, but in light of current events I would imagine that these programs should be revisited or done away with all together. Where did the mentality come from that says I want it all and I want it now. What is it that leads people to live beyond their means, is there more temptation then a generation ago? Maybe its the bombarding of constant advertisments or we have acquired the Kangaroo Rat syndrome of hopping around and collecting shiny items and squirreling them away in our nests. Perhaps Iam totally wrong, and should realize that I have but one lap to run around on this earth and should start kicking up my heels, for I will not come this way again. Yeah thats it... Where do I sign.
I guess I would say that I disagree with you. Why would I rather have people invade their 401K accounts? What about those who don't have a 401K or don't have sufficient funds in their 401Ks to get this benefit? You can argue that this takes the costs off the government books, but I'm not persuaded.
I just threw out the 401K but it could also be someone's IRA. The purpose of this is to force someone to have skin in the game by saving their own money for the home instead of just free money from the government.
Quote:
I allow that there is some rationale for that (this is, after all, the rationale for a home mortgage interest deduction, isn't it?), but isn't it possible that this may tend to get some people into houses they can't otherwise afford?
That is how the program is currently set up now. You get an $8k tax credit for just signing on the dotted line.
Quote:
It is possible that this is just an $8,000 give away with no good accrueing to the public at large, beyond the first time home buyer?
Wish it was only that but you qualify for this tax credit as a first time home buyer if you haven't owned a home for 2 years (i think that's the time limit). If it's out of someone's own svings account, it amounts to only a fraction of lost revenue for the government.
__________________
John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
I would have to imagine that the subsidized monies offered by both Fannie and Freddie ponied up better then any 10k of a 401k.
This is off the thread topic, but can you say some more about how Fannie and Freddie operate, to your knowledge. I assumed the government's only role in these mortgage companies was to guarantee the principle amounts, but not to subsidize the interest rates. What do you know about subsidies?
Quote:
They are also the ones that flutter around the overtime book like moths around a lightbulb.
What is the "overtime book?" Are these people wanting to work extra to earn more money? If so, I don't see anything wrong with that. That is how capitalism works -- incent people to work harder, work longer, which results in the more rapid creation of wealth. I would agree that squandering one's money on snazzy cars -- when one is not sitting on a fat bank account -- is evidence of bad management of one's finances.
Quote:
Where did the mentality come from that says I want it all and I want it now. What is it that leads people to live beyond their means, is there more temptation then a generation ago?
This is a very interesting question. I personally feel that people have incrementally been lured into this mentality by advertising, television, and businesses pushing the consumer economy. Of course, it is our own fault for not resisting these messages, for not seeing through the self-contradictions of advertisements and seeing the value of living within our means. Why do we need all the crap that business sells us now? How many different entertainment devices can we buy now? Are we any better entertained than formerly? I wonder. How about all the myriad kitche gadgets. Are we any better fed? Do we enjoy our food more than formerly, have these gadgets actually delivered more pleasure? It is questionable.
Fieldmouse: I'm not sure you followed my response closely, but no matter. I think I'm largely agreeing with you. And I do loathe the government randomly giving money away. That seems very imprudent. It also seems questionable whether this is constitutional. If there is not a clear and obvious benefit to the general welfare -- rather than just a benefit to the subject individual who is getting the hand-out -- how is this transferral of wealth authorized in the constitution? And not to side track this thread or open a whole other can of worms, I'm also of the mind that the "promote the general welfare" clause of the constitution has been pushed way to far by congress to the extent of wielding unconstitutional powers in many circumstances.
I made no reference to interest rates, but where did Fannie and Freddie acquire the funds to guarantee loans? Where not these programs funded by the taxpayer for the last twenty years or so? Are not all government programs subsidized through taxpayer revenue? The money has to come from somewhere right? One has to have financial backing to guarantee a loan, even for the government, one would expect.
Does it count for property? I know of 35 acres in Wyo for $11,500...get it for $3500 or so would be nice...
__________________
I love Christmas lights. They remind me of the people who voted for Obama. They all hang together; half of them don't work, and the ones that do, aren't that bright.
For those who understand, no explanation is needed. For those who do
not understand, no explanation is possible.
A golf course is a willful and deliberate misuse of a perfectly good rifle range.
Duh, nevermind......I got hung up on FM's reference to GW's use of our 401 for first time home buyers. Did not notice the trend title concerning the 8k tax break. Doin too much at one time. Old age setting in.
Tax credit for first time home buyers?
