Homebuyer Tax Credit Cost Rises to $16 Billion

By John Curran | May 6, 2010 | +

There’s updated data on the cost to taxpayers of the Homebuyer Tax Credit, which expired at the end of April. The U.S. Treasury reports that through March 27 some 2.2 million people had filed for the credit and the cost to the Treasury was nearly $16 billion. That’s up from 1.8 million filers through late February at a cost to Treasury of nearly $12.6 billion.

Given anecdotal evidence that April was an especially active month for home-sale transactions given the program’s pending expiration, it’s fair to assume that the final cost to the Treasury will exceed $20 billion.

So what do you think: Was it worth it?

Related Topics: Economy & Policy

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Ffred

I have to admit that I’m leery about using taxpayer money to stimulate the economy. Not because it doesn’t work: I think Justin’s arguments in the past were quite good. What I’ve never been comfortable about are conventional notions of economic health. Without a good ecological metric, I can’t help but feel that a lot of relevant cost and sustainability figures are being swept under the carpet, and that lump is getting pretty big and toxic.
http://rodgermmitchell.wordpress.com Rodger Malcolm Mitchell

Ffred, ease your mind. The Homebuyer Tax Credit doesn’t cost taxpayers one cent. Federal taxes do not pay for federal spending. There is no relationship between taxes and deficits.

Also, there is no “cost to the Treasury.”

“Deficit spending” and “taxpayers’ money” are semantically poor choices for what really is money creation, It’s positive for the economy, not negative.

You and your grandchildren will not pay to finance the Homebuyer Tax Credit.

Look at it this way. The government spends money, at no cost to you or your grandchildren, to pay for such benefits as armies, schools, health insurance, research, roads, bridges, thousands of other beneficial projects and yes, homes, all of which will benefit you and your grandchildren.

Rodger Malcolm Mitchell
Ffred

I’m aware of your position on money creation, and while it doesn’t quite sit right with me, I don’t consider myself at all qualified to debate that point.
.
I do agree in principle about strong infrastructure spending and its future returns, but then we get back to my nervousness about what we call essential systems, and what is a good measure or model of systemic health. Does encouraging people to buy homes (and cars and other “stuff”) truly improve our economy or just postpone the reckoning as hidden costs strain the walls of the cache to the point of bursting? Sounds Greek to me, if you’ll pardon the reference.