With Gov. Schwarzenegger promising $200 million in tax credits to homebuyers, Paul Shigley says it's worth looking closely at the promises that such credits create new jobs and bolster the economy.
Shigley is taking his lead from a recent article by Evan Newmark in the Wall St. Journal's blog where Newmark challenges the idea that subsidizing homebuyers is the right thing to do.
Shigley writes, "...all of the evidence says that last year's program did nothing more than permit homebuilders to unload inventory. According to the Economic Development Agency, construction jobs fell by 18% to 570,000 in 2009. The CBIA itself bemoans that housing starts remained at the lowest level ever recorded in 2009.
I'm going to suggest that if the government wants to subsidize new housing, it should fund the units Californians actually need – and not simply toss money untargeted into the market."
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