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Cash to Burn Down Your House?

Fannie Mae needs another $10.7B from the government.  Shocking.

Here is an idea:  Instead of having another cash for clunkers or cash for umbrellas program, why don’t we give people cash if they burn down and destroy their houses.  Let’s get rid of the housing inventory quicker and start from ground zero.  Less supply means that prices must stabilize right?  Not only that, but demand for new houses will go up because dilapidated foreclosures will be taken out of the picture!

Subsidies only make pain last longer.  If prices fall quickly to where they naturally *want* to go, then the economy can start working under its own power and not merely from government stimulus.  It’s interesting if you actually dig into Goldman’s report on a 4th quarter GDP increase of 3% you will find that they are not expecting growth to be sparked by market forces, but 3% growth sparked only by government stimulus.  Perverse isn’t it?

Posted in Economics, Markets, Politics.

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