Proficient Note Buyers
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November 02, 2009
Collective Stupidity
I remember the first time I heard about the giveaway programs the government devised to 'jumpstart' our stalled economy. The first was the (up to) $8,000 First Time Homebuyers Tax Credit. Hmmm...I thought to myself..."First Time Homebuyers" - let me guess, that will exclude me from participating, right? Yep.

The next was the wondrously disastrous Cash For Clunkers. Trade in any beater for up to $4,500 toward the purchase of a new, more fuel efficient car. Dang! Both of my vehicles, although paid for in full, are worth significantly more than $4,500. Aced out again!

Now we're starting to get the data in on the success (failure?) of these programs, and as ugly as it is, it shouldn't come as a surprise to anyone. I challenge you to find me anything the government does that is cost efficient.

The FTHBTC (the acronym for the tax credit-thingy - I just hate having to type it all out each time) is currently up for an extension by the wizards in Washington. This time they are actually looking to increase its scope to homebuyers looking to move up. (Read the article posted to this website for the proposed parameters)

According to the Brookings Institute, 85% of home sales that involved the FTHBTC would have happened even if it had never existed. In other words, 1.7MM of the 2MM homebuyers who took advantage of the 'free money' would have bought anyway. The estimated cost to the government (read: YOU and ME) per house? $43,000 Yikes!

Moving on to the Cash For Clunkers program. Here is another example of government inefficiency at an impressive level for even the most incompetent - our elected officials.'s estimate at the cost (to YOU and ME) per new vehicle sold under the CFC program? $24,000 Forgive me if I'm just stupid, but wouldn't that pretty much just pay for every new car purchased under the program? Why didn't they just give them away at the dealerships?

Edmunds estimates 82% of the cars sold under CFC would have sold without the credit. So, of the 692,000 vehicles sold under the program, only about 125,000 of the buyers were enticed by the program. What a bargain! (for THEM, not for US)

People, I can't stress how terrified I am of our government and the extent to which they will spend YOUR money and MINE to show us we can't manage our lives and our money without them. Do you find it even a little bit odd that ALL these stimulus programs out there don't directly benefit YOU? Do you know why that is? Because YOU are the one expected to pay for them!

If you think I'm crazy, look no farther than how the government is now deciding appropriate compensation for banks, Wall Street firms, etc. Do you really think they'll stop there? If they can decide compensation for private enterprise, how long until they find their way to YOUR company and decide how much YOU should make?

"Democracy can only survive until the people discover they can vote themselves largesse from the public treasury." So what happens to democracy once the giveaway programs get into full swing? Do you really want to find out?

Write your elected officials and tell them enough is enough! Remember, the government's only source of income is US! (and our children, and our children's children, etc.)

Make it a great week.


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