Lacey Smith

Housing market double dip proves government failed

In Uncategorized on June 8, 2011 at 2:38 pm

If there was any question if the Bush and Obama stimuli succeed, the recent numbers on the housing market solidly answer: NO!

Even after new home-buyer credits, government stabilization plans and increased foreclosure regulations, the home market has double dipped.

In fact, the Mail Online is reporting that the dip is worse than the Great Depression.

Rather than letting the housing bubble burst and prices readjust themselves, the Obama administration tried to prop up the market, preventing the correction.

That only lasts so long, though, and now the housing market is paying for it again.

Home sales aren’t the only place where the Obama policies are having unintended consequences.

The price of used cars has gone up. Used cars on the market are so pricey that some are saying it “doesn’t make sense to buy them anymore.”

Although it’s not as simple as pointing to the Cash for Clunkers program as the single cause, logic tells me that it played a role. Rather than trading in old cars for new ones, people destroyed their old cars, reducing what was available on the market.

It is impossibly naive to assume that the Cash for Clunkers program had no effect on the used car market.

And if used cars are out of people’s price range they will go without, which will hurt sales. Additionally, if dealers have to pay more for used cars, they may also have to sell those cars at a slimmer profit margin, further damaging their ability to stay in business and further hurting the economy.

These two things on their own might count as the “headwinds” and “bumps on the road” the President Obama referenced in a recent speech, but coupled with the high gas prices, the earthquake in Japan and unease over European debt he mentioned and added to continued high unemployment, inflation risks and the devalued dollar, the ballooning deficit and the chance of a food shortage I think they are warning signs.

The Bush and Obama plans for preventing our choices from hurting us has failed. We must bear the consequences of overspending, undersavingĀ  and being irresponsible.

It will also hurt those of us who have made wise choices, saved and prepared, but I’m not sure that’s different than what’s happening now anyway.

Big government cannot solve these problems and we should quit accepting their failed responses.

Individually, we need to prepare our households for what might be coming.

Nationally, Obama needs to critically evaluate the situation and make course corrections.

Now is a great opportunity for him to show us good leadership skills, stop relying on clearly failed policies and lead out in a new direction.


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