February 4, 2009: The Senate voted Wednesday night to give a tax break of up to $15,000 to home buyers in hopes of revitalizing the housing industry, a victory for Republicans eager to leave their mark on a mammoth economic stimulus bill at the heart of President Barack Obama’s recovery plan.
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Uh,
The red line continues downward after it leaves the gray zone.
That can’t be right.
That would mean… oh…
Oh,… well it all depends on how you look @ it. Its clear that Government stimulus worked and was able to keep the level at 400 k annually. It appears we’re heading to 200k annually. If the stimulus cost 700 billion and was able to sustain 200k more in house sales each year, then all we need is 3.5 trillion in annual stimulus every year to get house transactions back to their proper rate of 1,000 k a year!
Simple math right?
You forgot to account for the Law of Diminishing Returns. The amount of money necessary is exponential, so to get to 1,000k houses, we’d need $240,100,000,000 billion.
It’s just a few more zeroes to type into the fed computers, right?
Don’t bring that voodoo eCOnoMIcs into this discussion. When viewed from a high-up top level using simplified models, things behave very predictably and linearly!
or we could just pay a bunch of unemployed construction workers to bulldoze the homes. gee, think of all the jobs that will create!!
I mean, first, you’d obviously have an increase in demand for bulldozers. that’s good for the bulldozer industry. then we’d have an increase in the demand for waste removal people, and the associated waste removal machines. then we’d need a place to put the waste, which would increase the demand for bulldozers to clear the land space, which would increase the demand for bulldozers, again. with all these bulldozers, we’ll have an increase in demand for bulldozer mechanics. and of course the associated trucks to help transfer the waste, the truck drivers, repairmen, and of course the diners along the truck routes.
probably some of the waste could be recycled (for what I’ve no idea, but that doesn’t matter), which would create jobs in the recycling industry. GO GREEN!! and we’d need to build more of these recycling centers, which would put those unemployed construction workers back to work. Which, all other things being equal, would raise the demand for bulldozer drivers (being “misallocated” driving the bulldozers in the first place), thus increasing their wages.
WOW!!! I’ve solved our recession. Where’s my spot at the NY Times and my nobel prize?
Where’s my spot at the NY Times and my nobel prize?
You need to be a bit more scientific. For starters, take the trendline from ’02 to 05, extrapolate that out to ’11, and call it Potential New Home Sales. Then the area between potential and actual is the New Home Sales Gap that you need to fill.
Just tell them to be careful and don’t break any windows! We know THAT doesn’t work!
Why is it a victory in general if home owners preserve the added value to their house ?
Why can’t it be seen as a victory that new home owners can afford a house because it’s cheap ?
They would not need a mortgage, they could save and pay up. It used to be that way in the USA before the big bank and wall street takeover. Now, you can’t do anything without a loan, completely stupid.
From the looks of this graph, it looks like the home bubble started in 1991, not in 2002 like everybody is thinking. It was Bush father that started the home bubble and bush son just finished it off, LOL !
By looking at economic graphs, it looks like we’re living in times which are “off the chart” !
You see a steady evolution of minor ups and down, modulated by static from the beginning of the 20th century all the way to the later 1990′s. Then BADANG big upswings and downswing movements.
It’s as if it was deliberate, something has become powerful enough to manipulate the markets. Even the great depression crash of 1929 looks like a minor slump when you take the dow jones graph and set it for maximum. We live in crazy times. It’s scary.
I have a great idea – why don’t we just build a few ghost towns like China?
Just think how much that would boost GDP.
Detroit is destroying them, unfortunately, so we’re shrinking into a recession because of it.
What do you mean by “destroying them” ?
Are you saying that detroit is bulldozing abandoned buildings ?
Yes. Buildings have actually been razed to the ground.
Yes, Detroit is becoming a ghost town. One built by capitalism and then destroyed by socialism. Everybody’s leaving and those who are stuck behind are on the dole. Detroit reached it’s peak circa 1950 with almost 2 million people and was at one point the 4th largest city in the US. It’s now around 20th. It’s lost 25% of it’s population in just the last 10 years, going from just under 1 million people to about 720,000 poor souls with no idea why.
Of course, we know when socialist policies really began to take hold in this country. Union dominated Detroit was at the forefront. And along with it came all the rotten corruption through and through the city government which these policies brought.
We have a mayor and a city council now who do not want to face the real problem. All the whining and complaining is over how much federal money the city is going to lose unless they can somehow get the count up another 30,000 or so to 750,000. The mayor wants a recount and the head of the city council tells us that the people were under counted because so many of them are in jail in other towns!
I mean, in a rational world wouldn’t you rather not own up to them?
It’s really hilarious. There’s ongoing talk of a multi-billion dollar passenger rail system from nowhere to nowhere serving nobody and a multi-billion dollar remodeling of the Cobo Hall convention center that no one wants to come to anymore. Talk about kidding yourself. So typical of socialist planning, build a monument and they will come. Never occurs to them to just get the hell out of the way.
Really sad.
They used to joke around here: “Last one out of Detroit turn off the lights”.
Not such a joke anymore.
I’m waiting for them to count me as a citizen because I passed through there once to go on vacation to Toronto.
LOL, then they should start counting all the raccoons, possums, foxes and coyotes that have moved into Detroit. Maybe they can qualify for federal grants as a fish and game preserve.
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