May 28, 2010
Nominee for Worst Proposed Legislation of 2010...
Now, I completely understand that there are many people in the homebuilding industry who really want to start working again and expanding. It's their livelihood and who wouldn't want a bigger paycheck in these tough economic times.
But, the idea that the federal government should essentially start financing new home construction even though there is a huge glut of unsold inventory is, well, just foolish. Here are the details of this dubious nominee:
H.R. 5409, the Residential Construction Lending Act, would create a new residential construction loan guarantee program within the Department of Treasury to provide loans to builders with viable construction projects. Designed to unfreeze credit for small home building firms, the measure would expand the flow of credit to residential builders on competitive terms.
Think about it this way. You have a field full of The Veggie That Nobody Wants. Because nobody wants it, the growers are laid off based on the lack of demand. But, rather than diversify into something that there is demand for, the government just steps in and finances/guarantees the funds to plant many more fields of The Veggie That Nobody Wants.
All in the name of job preservation and economic growth.
Folks, its this type of strained and really intellectually dishonest logic that caused the current problem in the first place. It's like making a drunk feel better by giving them more alcohol. Sure, it might work in the short term but, in the long run, its just causing more damage to the system.
--Chad Emerson, Faulkner U.
May 28, 2010 | Permalink
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