So here's an interesting economic indicator for you...
How strong is our economy without government intervention? Check this out:
Sales of newly built homes plunged -32.7% in May 2010 following the expiration of special tax credits for home buyers. A year ago, the decline was -16%.
Sales for March and April 2010 were actually up 12.1% and 14.7%.
This underscores how much those subsidies fueled sales in previous months. In an era with historically low interest rates, people are not running to buy homes and have to be enticed with government tax credits. That’s pretty scary stuff.
Think our economy is “recovering”? I have serious doubts. Without the government intervention, the illusion and façade goes away, and we see the ugly picture of how things really are.
In response to the May plunge, guess what just happened at the end of June? Congress passed (and the President signed) a bill extending the home buying tax credits to September 30th of this year. Think the writing is on the wall? Yep. Our government realizes the housing market still needs to be propped up and that the economy is not that healthy.
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