Help for Main Street
Amid all the high-level bailouts to corporations, Rep. David Dreier, R-Glendora, has introduced a bill that would go to the heart of our economic woes.
Dreier's H.R. 7325 would provide substantial tax incentives for those who put good-sized down payments on homes, hopefully unclogging the glut of foreclosed and unsold homes that has dragged down the U.S. economy.
According to MDA DataQuick in San Diego, 54.6percent of Southern California homes sold in November were foreclosures.
The bill, called The Economic Recovery Through Responsible Home Ownership Act, would provide tax credits of $5,000 to those who put at least 10 percent down on a home purchase. For a 15percent down payment, the credit would be $10,000.
The temporary credit would be available only in 2009 and 2010. To keep speculators out of the mix, the tax credit would have to be repaid if the home is resold in less than three years.
That's a simple, direct approach to easing the housing and financial crisis. It gives people incentives to put enough of their own skin in the game to show they're serious about buying - and keeping - a house. And it's a substantial enough tax reward to help get the housing market moving again.
Responsible lending and borrowing will be the key to a long-term economic recovery, Dreier suggests, in contrast to the kind of home buying that brought on the housing bubble and collapse.
Too many people irresponsibly bought homes they couldn't afford, and irresponsible or even fraudulent lenders took advantage of them for quick payoffs. The shaky loans were then bundled, sliced and diced and sold to investors hungry for high returns, fueling the bubble whose collapse brought on the recession.
Dreier's legislation, which he plans to reintroduce at the start of the next congressional session in January, looks like a straight-forward approach that would help get the housing market moving again and reduce the number of empty homes in many neighborhoods.
And it would provide some benefit to regular people, not just Wall Streeters and banks.
