Notes from the Eight-is-Not-Enough File
The vicious circle of declining home prices, rising foreclosures, and further depressed home prices has created a parallel vicious circle of economic policy getting ripped apart by political self-interests, requiring an even heavier hand of economic policy.
By looking at where new-home sales have perked up, one can guess that California, which has added its state income tax credit of up to $10,000 to the first-time home buyer tax credit ante rolling out from the United States government, can serve as a poster child for more stimulus to jolt some virtue into those vicious cycles.
Movements in support of higher home buyer tax incentives are still operating at a state and national level.
Here’s an argument from yet another Ivy school economist about the shortcomings of the Obama plan to stabilize housing by stopping a slew of foreclosures from occurring. Yale economics professor John Geanakoplos stopped by Squawk Box to talk about foreclosures with Huffington Post diva Arianna Huffington, Becky Quick, Carl Quintanilla and Joe Kernen. Watch below to see why Geanakoplos thinks the Obama administration’s plan to prevent foreclosures will be ineffective.
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