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Where Do We Stand? Extended Buyer’s Tax Credit- Politics



What are the consequences?

In an attempt to push the economy ahead short term, Congress has extended and enhanced the home buyer’s tax credit. $10.5 billion was spent in ’09 on the tax credit and no doubt at least that much will be spent on the new round pushing our national debt even higher. As we found out in the late ’70s and early ’80s, massive debt will mean much higher interest rates.

Are we willing to accept those higher rates to make things a little better in the short term or should we be taking a stand and saying no more? The consequences are all about the choices we make. Where do you stand?

Realtor, Speaker, former Indianapolis radio personality. Least prettiest person ever on HGTV. Crashed in a helicopter and a Cessna 182. Seven lives left. Blessed by an amazing family!

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  1. Elaine Reese

    November 8, 2009 at 1:12 pm

    I remember those days of 16% interest rates. My husband and I purchased a home at 11% right before that, but we did not go with the no-cap balloon loans that caught many off-guard. We and our friends were all upper middle income so we didn’t feel the effects that much. It was a much different climate then. The only credit cards people had were gas cards and dept store cards which we paid off each month. (Mastercard and Visa were just getting started.) We personally knew the bank president that granted our home and car loans. We ate dinners as a family at home with the produce we grew in our little gardens. We owned freezers that were filled with a side of beef and pork. If we couldn’t afford something, we didn’t buy it .. we actually SAVED for it. That climate was a much cheaper way to live, and most people didn’t have the “entitlement” attitude that is prevalent now. So we need to look at the whole picture of then vs now.

    While the extended/expanded stimulus may not be good for the economy long-term, what real estate agent is going to advise their client to not take advantage of it “for the good of the economy”? If the program helps my seller sell their home and move on with their life, then it’s my job to promote the program to potential buyers. If my buyer can get $6500 from the gov’t – like the banks & Big 3 get – I would be remiss if I didn’t help them do that. Regardless of my personal feelings on these programs, I have a job to do. Asking a client to boycott a program for the good of the economy isn’t realistic.

    On a personal level, I think all this debt is horrific!

  2. Bob

    November 8, 2009 at 1:50 pm

    An insolvent government leads to greater government takeover of the private sector. Is it by design or ignorance?

  3. Greg Cooper

    November 8, 2009 at 2:08 pm

    Elaine….well said. I spoke on the radio this week and said in the Macro sense we would pay for incurring more debt. Consumers, however should take the money!

    Bob…for the idealogues in power….the means justify the end. The more time that goes by and more evidence we have….the more we know what you just said is true.

  4. Benn Rosales

    November 8, 2009 at 2:28 pm

    Greg, sometimes you just have to rob peter to pay paul, and you step on mary to do it- it appears to be a reality. Is there much that can be done to soften the blow later? Nope, because one way or another we’re going to see higher interest rates, I personally believe with or without the tax credit. We’ll also see higher taxes, either with this administration or the next because peter is going to get his money.

    I do believe this bailout is helping a lot of folks right now, there’s no doubt, and I wonder if it would be worse longer without it- it’s hard to tell.

    Another fantastic addition.

  5. Bob

    November 8, 2009 at 2:30 pm

    Benn, its the cost of the credit vs the ROI. @$43k each, I have to believe there was a better way.

  6. Benn Rosales

    November 8, 2009 at 2:41 pm

    Bob, no doubt, it just doesn’t make sense to me, not at all.

  7. MIssy Caulk

    November 8, 2009 at 11:08 pm

    Well, I was not in favor of the extension or the expansion. Are they crazy up there? Look at the income limits that get a credit, even for move up buyers…A couple making up to 225K a year can get a credit? pleeeeeeeeeeeeezzzzzzzzzzzzzzzzzzz.

  8. Dan Connolly

    November 8, 2009 at 11:09 pm

    Why does it cost 43K per 8K tax credit? Plain English please!

  9. Paula Henry

    November 8, 2009 at 11:18 pm

    Greg – Well Spoken! I have never written a post about the $8000.00 tax credit and don’t have a count down in the top right corner of my blog. Have I written contracts for clients who have used the credit? Yes! They know about it and it’s not up to me to discourage home ownership.

    There will be a price to pay for the tax credit and yes, it will fall on the shoulders of our children and grandchildren. Another point we should consider, is the unknown. How many people used the tax credit, but are not ready for home ownership. Will they be the next casualties in the foreclosure market? If they don’t stay in the home three years, will the cost of paying back the tax credit put them in bankruptcy court?

    I don’t know the answers, just the questions in my head.

    • Paula Henry

      November 13, 2009 at 10:15 am

      Retract I did post one article about the $8000. tax credit. Just wanted to correct the error.

  10. Greg Cooper

    November 9, 2009 at 7:24 am


    Forgive me for putting words in Bob’s mouth but that number I believe reflects how much money that was spent on the housing stimulus divided by the number of buyers who participated plus the 8K back. In other words….the actual cost per first time home buyer is $43000 each.

  11. Jay Thompson

    November 9, 2009 at 1:02 pm

    “Why does it cost 43K per 8K tax credit? Plain English please!”

    Because the vast majority of home buyers that took advantage of the tax credit would have bought a home anyway without it. Depending on whose numbers you believe, 200,000 to 355,000 people bought a home because of the tax credit. Divide that by the 10 BILLION or so it’s cost so far and you get $28K – $50K per home actually sold due to the credit.

    That’s QUITE the subsidy to help the real estate market.

    My kids, grandkids and great-grandkids will be paying for this.

  12. Greg Cooper

    November 9, 2009 at 1:47 pm

    Paula….you have hit upon a big unspoken issue that we won’t know for several years. How many of those who used the credit will either lose their homes through foreclosure or BK? I don’t know who or how these things get tracked but you can bet it is…and not by the Feds.

    Jay…thanks for explaining it more precisely. To put some synthesis to this I agree that most would have already bought and those that needed the stimulus may well be those that will become the failures that Paula is alluding to.

  13. Joe Spake

    November 9, 2009 at 5:40 pm

    I do not favor the credits. Most of the houses I sold in the last 6 months were to buyers taking advantage of the credit. I have talked to most of them in the last couple of weeks, and they said they would have bought anyway. The $8000 was a nice Easter egg. (and as Jay has said many times, a very poor reason to make the decision to buy a home).
    I would like to see the market find its real bottom then start back with a healthy recovery. The credits are just postponing some pain down the road.

  14. Ken Montville

    November 9, 2009 at 8:31 pm

    I agree that the credit is a stimulus. Buyers that were in the market, even if only in their minds, got busy and bought a house which stalled the free fall in housing prices. The market was “stimulated”. Now, whether it needed to continue through the normally slow Winter months is another question.

    As to the expansion to existing home owners, I write on my personal blog that many of the existing buyers that may want to take advantage of it probably won’t because they can’t sell their existing home without a home sale contingency on the other end. The income limits are pretty robust but the purchase price cap is a respectable $800,000 which is only slightly above the FHA limit in my area. I think it really depends on your geography as to whether this is outrageous or simply a nice perk.

    I totally agree that the credit really just entices buyers that might be buying anyway to buy. That’s why it’s called a stimulus. Will it come back to bite us? I’m not so sure. Lending guidelines are so damn tight nowadays that I’m pretty sure these folks are going to be ok. Will it cause interest rate or general economic inflation? Not in and of itself. There’s plenty of other money being pumped into the system that will cause that but my guess is that State and Local governments will do plenty of taxing come 2011 and keep inflation down. After all, they won’t have the transfer and recordation fees from real estate to keep themselves afloat.

  15. Dan Connolly

    November 9, 2009 at 9:31 pm

    The thing that kills me is that everyone moans and groans about what this will do to our grandchildren yet we spend as much in ONE month in Iraq (10 billion/month in Iraq alone) as we do on the entire homebuyer tax credit. And we have been doing that for some seven years. It’s a tax cut people! Since when do conservatives complain about tax cuts? A lot of the buyers don’t get money back, they just don’t owe as much! It’s good for the real estate business and I am happy it has been extended.

    I still believe that the so called “cost” of the tax credit is inflated political spin. I would like to see some real numbers on that, from an unbiased source (as if there is one). What did they spend the money on? advertising? Bribing the politicians to vote for it (or against it)?

  16. Fred Glick

    November 13, 2009 at 9:24 am

    OK, here’s my 7 cents (due to inflations, 2 cents has been increased).

    If you saw my CNBC interview last week (still available at ), you would see that I called for the repeal of the credit and to take that money and earmark it for jobs.

    Well, after a bit more thought, 9 more cups of coffee (no, not at one time), a little discussion and putting on my diplomacy coat, I have come up with a compromise.

    How about leaving the credit as is but changing it ever so slightly:

    1. Monotize it so the buyer gets the money help as direct down payment.
    2. Make them pay it back, with 6% interest over 10 years.
    3. Use the recycled principal and interest to help fund the new health care bill.

    Now, what did we just do?

    Kept the status quo of the number of buyers who would have taken the credit anyway, brought the money back to coffers (a la TARP), lowers inflation (less dollars out there) and help reduce the tax burden we may have felt and made people better so they could get jobs and buy homes!

    It is government assisted capitalism at it’s best!

    Call your Senators, Representative and the White House today and let them know Fred Glick sent you.

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The House Judiciary antitrust investigation holds big techs’ feet to the fire

(POLITICS) CEOs of Alphabet, Facebook, Apple, and Amazon set to testify in House Judiciary Committee antitrust investigation hearing today.



house investigation

The House Judiciary Committee is closing in on the end of a year-long investigation into tech giants Google, Facebook, Apple, and Amazon, to evaluate possible antitrust abuses. CEOs from all four companies were set to testify on Monday, July 27, 2020. The hearing has been pushed back to Wednesday, July 29, to allow members of Congress to pay respects to civil rights leader Representative John Lewis (D-GA) who died of pancreatic cancer on July 17.

Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook, and Sundar Pichai of Alphabet (Google’s parent company) have all agreed to testify. This will be Bezos’ first time in front of Congress, whereas all the others have testified before on different matters. Twitter CEO Jack Dorsey was invited to testify by Representative Jim Jordan (R-OH), but is expected to not attend.

The Antitrust Subcommittee began the investigation in June 2019. Each business has been the subject of scrutiny for their roles in dominating their respective industries and playing an outsized role in market competition for smaller businesses. The Committee is interested in evaluating current antitrust laws and whether they apply to, or should be updated for, these mega corporations. They have already heard testimonies from smaller companies like Sonos and Tile about these companies’ alleged monopolistic practices.

The focus of the investigation for Apple is on the App Store, and whether it has implemented policies that are harmful for app developers. Google has a tight hold on the online advertising market. Amazon – which during a five-week period early in the pandemic saw an increase in value equivalent to the total value of Walmart, the world’s largest firm – has been criticized for its treatment of brands that sell on its e-commerce platform. Facebook is being investigated for its acquisition practices, cornering the social media market with purchases like Instagram.

Amazon is expected to face additional scrutiny for its treatment of warehouse workers during the pandemic. Facebook and YouTube (a subsidiary of Google) have been the subject of regular criticism about monitoring hate speech on their platforms, and their treatment of the workers responsible for doing so (Facebook in particular).

The hearing is set to occur virtually in order to adhere to social distancing guidelines. Watch the hearing live at 12:00 p.m. EST Wednesday, July 29 on the House Judiciary Committee’s YouTube channel. Please do note the hilarious irony of streaming a Congressional antitrust hearing on YouTube, which is owned by Google, which is owned by Alphabet, which is testifying at said hearing. God Bless America.

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Additional unemployment benefits outside of the CARES Act

(POLITICS) Unemployment is at an all time high in the United States and individuals need to be aware of reapplying for additional benefits.



unemployment broke

June saw some additional jobs in the US and unemployment fell as of early July, but CNBC advised pausing on any celebration just yet, saying that “The employment crisis is still worse than any time since the Great Depression, the country’s worst economic downturn in its industrial history.”

The unemployment statistics in our country right now are really scary – especially for individuals and families that see a looming deadline of July 31 for the supplemental $600/week provided by the Federal Government through the CARES Act put in place in March. There are discussions on extending these benefits as many families have not been able to replace their incomes or find new employment opportunities, but it doesn’t seem like anything has been finalized there yet. Congress is in the middle of a variety of options:

  • Discontinue the additional $600/week but allow those on unemployment to continue to file and receive their state benefits (usually up to 26 weeks or possibly extended up to 39 weeks by The CARES act)
  • Send out additional stimulus checks (Congress is currently exploring a $X Trillion stimulus package)
  • Extend the additional funding (on top of the weekly amount allotted by state) but cut it from $600 to $200
  • It’s also been put on the table in the House of Representatives “The Heroes Act” to extend the additional $600/week until January 2021 ($3 trillion).

There are some additional benefits that are available (different than the funds by the CARES Act), but you may have to reapply for them. So, make sure to check your state’s unemployment pages and your filing status. Some states do not require you to reapply and you can continue on with extended benefits.

According to CNBC, “The additional aid expires after the end of the year. (This is a different program than the one paying an extra $600 a week through July 31.) For some reason, the [Department of Labor] has taken the position that people have to file for the additional PEUC benefits,” said Michele Evermore, a senior policy analyst at the National Employment Law Project.”

No doubt that this can cause additional stress and uncertainty especially when you have questions about your filing and are unable to get through to someone on the phone. With the way that the unemployment cycle is setup, technically July 25 is considered the last date for that cycle (and July 26 for New York), so be sure to check and see what the next steps are for you if you are currently filing.

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How will pausing the reopening of states impact the recovery of the economy?

(POLITICS) The resurgence of COVID-19 has left Americans with a lot of questions about our nation’s economic future. That ambiguity is seemingly a feature, not a bug.



COVID-19 reopening economy

The rest of the world watched as the United States dramatically reopened “the economy” last month. Now, it seems we’ve changed our minds about that.

The White House has repeatedly said that it will be up to individual states to form their own pandemic response plans moving forward. But letting local governments devise their own solutions has produced large gaps in their preparedness, as well as profound confusion around the best practices for balancing the country’s public and economic health.

California, which represents the largest economy in the US and the fifth largest in the world, was one of the first states to put serious quarantine restrictions in place. The decision to relax those orders only came after anti-lockdown protestors demanded that Governor Gavin Newsom reopen the state’s beaches, businesses and churches. Newsom may now regret this capitulation as California just called for a second round of statewide lockdowns.

Other state legislators are slowly following their lead, as the threat is becoming very dire in some places. Florida, for instance, is now a global hotspot for COVID-19 and Miami is being called “the new Wuhan”. The state is also currently struggling against another wave of unemployment, partly because their economy is heavily dependent on summer tourism (which has persisted despite the spike in cases, but not nearly at pre-pandemic levels).

Florida, California and Texas are altogether responsible for 20 percent of all new COVID-19 cases globally.

Every state is fighting two battles here. Coronavirus relief efforts in the US are still seriously underfunded, and most health organizations here lack the resources to effectively test and treat their communities. But the problems that have emerged for workers and small business owners, like evictions and layoffs, have also been devastating in their own right.

In essence, the United States reopened in an effort to curb the nation’s financial freefall and ballooning unemployment. Economists predicted at the beginning of July that reopening would allow the US to avoid a recession, and all would go smoothly. These projections likely did not account for a spike in cases that would halt this economic rebound.

That’s not to say the circumstances here haven’t improved at all over the past months; currently there is no acute shortage of ventilators, and doctors have had some time to refine their strategies for treating the virus. Overall, the national unemployment rate is slightly declining, while working from home is going so well for companies like Twitter and Facebook that they will be permanently switching much of their staff to remote work.

By comparison, though, New Zealand took the pandemic much more seriously than the US did, and they are objectively in a better position now in all respects. Prime Minister Jacinda Ardern cracked down hard and early, closing the country’s borders completely, and instituting rent freezes nationwide. As a result they have virtually eradicated COVID-19 within their borders. A report from S&P Global also expects New Zealand’s economy to recover quickly compared to the rest of the world.

While this tradeoff seems like a zero sum game – as if we have to pick either our health, or our wealth – it is not. In fact, we could very well end up with neither if our lawmakers don’t proceed with caution.

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