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January 29th, 2009 9:51 AM by David W. Welch
With all the bailouts and stimulus packages and bureaucrats and fat cats trying to save the economy, I thought I would make a “Modest Proposal” (see Jonathan Swift). With an average price around $200,000, the government could purchase 3 million homes for about $600 billion. That is a savings of $100 billion compared to the first bailout and we have not even started with the $800 billion stimulus package or the $670 billion the Fed is pumping into the financial markets. I added all the packages together, and they work out to $7,250 for every man, woman and child in America.
Even if the government had to hold those homes for four years, which I am guessing would cost another $600 billion, we would still be ahead. Why you ask would they do this? Well, it would completely deplete the inventory of homes for sale. That would stabilize home prices, and actually push them back up some. I can’t speak for every market, but I believe Orlando’s prices have over corrected based on affordability, and are now a super bargain. With 3 million fewer homes to choose from, builders would actually have to start building again. The government could sell homes back in the markets with the highest demand at a rationed pace, and actually make money on the deal. Yes, it is crazy, but it is not nearly as crazy as giving billions to banks who won’t lend, or to corporations paying outrageous bonuses and buying corporate jets. I could go on, but I think you get the idea.
David Welch, Orlando Real Estate