Mike "Mish" Shedlock takes a swipe at the Golden State's $100 million project to get people to buy newly constructed houses. The New Home Credit, according to the California Franchise Tax Board, "is available for qualified buyers who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date." As of last Wednesday, the flush, solvent, well-managed state government had doled out just shy of $66 million to help Californians realize every American's dream of owning a home built by politically active contractors.
Shedlock goes on a rant:
It is beyond reckless to waste money like this in the midst of a fiscal crisis. If you want to know why California is broke and looking to increase taxes, such idiocy is always at the heart of the matter.
Moreover, note that the California credit is on top of the Federal First-Time Home Buyer Tax Credit.
A tax credit of up to $8,000 is available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.
There is a massive oversupply of housing and the Federal government and states are attempting to stimulate home building!
The most amazing thing to me in all this is the number of people who blame regulation for the current crisis. The creation of Fannie Mae, Freddie Mac, idiotic programs like these, and the existence of the Fed itself are what regulation brings.
Meanwhile, the town of Victorville teaches Sacramento a thing or two about how to deal with excess new housing stock: