So, That's Why Zelensky Can Wine and Dine With the World's Finest With...
WaPo Slapped With Community Note Over Barstool Sports Piece. Dave Portnoy's Reaction Is...
Here's the Pro-Life Message Airing in Ohio During the OSU-Notre Dame Showdown
Texas National Guardsmen Attempt to Stop the Flow of Illegal Immigrants Into Eagle...
Details About the Third GOP Debate Have Been Released. Here Are the New...
We're in Trouble: When Teaching American Values Is Considered Problematic
MSM Ignores Death of Longest Suffering Female Political Prisoner in Modern History of...
Does This Mean Newsom Is Running for President?
Widow Sues Google After Husband Was Killed Following GPS Directions
Prominent Doctor Says Biden Wouldn’t Be Able to Answer the Question: ‘Who Is...
Biden Makes Bizarre Eyebrow Raising Gun Control Remarks
Private Video Captures What This Democrat Really Thinks About Biden’s Border Crisis
Leaders, Like Joni Ernst, Are Making Up For Biden’s Weak Policies Towards Iran
Government Isn’t the Only Tool for Protecting Competition
Orthodox Jews Expose Zionist ‘Antisemitism’ Racket of ADL
OPINION

Hiding Real Estate in Wall Street's Matress

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
Advertisement
Advertisement
Advertisement

Taking a page from Wall Street, once again, the administration embarked on a strategy that was guaranteed to stabilize home prices, incentivize purchases, and create a lot of grateful voters. 

Advertisement

Thus was born in 2009-2010 was the $8,000 tax credit for the purchase of a new home. 

The results, in typical Wall Street fashion, could be summarized by the end not appearing to justify the means. 

Before we get into the “how did that work out for you” analysis, it’s time to first look at another misguided Wall Street strategy. 

It’s very popular today to buy stocks simply for their dividends. 

The thinking is that the price of the stocks will be continually supported by those people who are in search of a better yield. 

Let’s face it, from savings accounts and CDs to Treasury notes and T-Bills, the current income streams are almost non-existent.  

Thank you, Mr. Bernanke. 

However, let’s examine the dividend strategy in 2000 when GE was being touted for its 3% yield. 

Over the past 11 years, you would have received some cash-flow, but watched as your principal collapsed from $57 per share all the way down to $16 per share. 

So much for that plan. 

Now, we get the results of the brilliant tax credit policy. 

Unfortunately, unlike the dividend play which can only hurt the individual that participates in it, the $8,000 tax credit program cost you and me, the taxpayers, $26 billion. 

Advertisement

Zillow has released information stating the average price of an American home fell $14,500, and is still declining since the credit program. 

That means that you save $8,000, but lost another $6,500. 

In a few communities it’s not that bad, but in some notable communities like Santa Barbara, California and for my neighbors in Flagstaff, Arizona the losses are between $30,000 to $50,000. 

Once again, another strategy designed to avoid the risk and ravages of the market has been rendered completely ineffective. 

In both instances, tucking your money away in a “Chock full o’Nuts” can and burying it in your backyard would have been a much wiser approach.  

Rarely will you hear someone on Wall Street or in Washington champion that tactic.  

How unfortunate.

Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos