Giving A Break To Those Who Need It Most

The House moved quickly in passing a $819 billon stimulus bill yesterday with two items included that I think are not just a waste of millions, but a clear sign that our Government simply doesn’t get the desperate and in-need America.

Remember last year, shortly after tax season when most America’s received a generous $500 or $1,200 stimulus check in the mail from Uncle Sam? That approach failed miserably. Most half-way intelligent American’s didn’t put that money back into the economy by buying a flat-screen or going on a vacation – most used it to pay off debt or applied it to their savings, adding to their nest-egg that would likely be needed in the coming months. We are as a whole, more in debt now then ever – why would this administration believe that a similar approach would result in a different outcome?

“Through June 6, the U.S. Treasury had sent 66.6 million payments totaling about $56.8 billion…” in stimulus checks. *

And good news for first-time home buyers in 2009. If you purchase a home this year you are likely to receive a $7,500 tax credit which you do not need to pay back so long as you live in the house for three years and you qualify under the minimum joint salary amount of $170,000. Yes, you read that correctly – you will receive $7,500 for FREE. This is a vast difference from the current law which gives first-time home buyers a credit of $7,500 which must be repaid in equal installments over 15 years (with no interest).

My problem with this credit is that first-time homebuyers are already at an extreme advantage due to the unfortunate market conditions. Home prices have plummeted, foreclosures continue to rise, and interest rates are a record low (30 year fixed @ 5.3 today**). Our concern should not be on helping people buy their first home, but on assisting those who have LOST their home or who are BARELY able to keep their home. This incentive should have been implemented in 2005 when I was trying to buy a small condo that was priced at THREE TIMES what it is worth today! When young professionals like myself could not afford to get INTO the market there was NO ASSISTANCE so why should we fork over money to those who are excitedly benefiting from the housing bust?
In 2008, “The number of American homeowners who faced foreclosure proceedings…passed the 2.3 million mark, an 81 percent increase over the previous year”.***

But let’s stop and talk about all the American’s that have NOT BEEN FORECLOSED on but are hanging by a thread each month to pay their mortgage. Those who are working extra shifts, searching for a second job, forgoing hot water when washing clothes, turning off their cable, phone and internet, selling a vehicle, unable to afford prescriptions, forgoing meals – this is the real picture of the middle-class Americans cutting back on life’s necessities in the hopes of keeping their heart…where their home is. These are the American’s we should help first – those who have experienced no advantages from the economic turmoil that has hit us hard and fast.

As banks are slow to lend money and mortgage companies are diligent in approving buyers, we can make the assumption that those who are currently buying a home are doing so because they are not the Americans in need. The tax credit should help those who are!