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Old 08-14-2009, 05:36 AM   #55
limoncello
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Join Date: Apr 2005
Location: South Carolina
Posts: 435
I agree, but with one exception on the housing/construction aspect.

One of the causes of the economic downturn was the residential housing bubble and accompanying mortgage crisis. For a variety of reasons (loose credit, overbuying one's income, high speculative construction) we overbuilt: there were too many houses in many areas.

Subsidizing new home construction would seem to exacerbate the problem. Why not subsidize (if you have to subsidize anything) the REMOVAL of housing from overbuilt areas by demolition of abandoned, derelict, or empty/foreclosed homes.

Time and normal market forces will correct the housing imbalance of supply and demand, but if an administration feels like it HAS to subsidize something, don't make the imbalance worse by adding more new homes in an already overbuilt areas. This would just put more pressure on prices.

The residential construction industry has to shrink somewhat. After a bubble like we just saw, the industry will not return to the peak 2007 levels for long while, in my opinion.

Construction is, and always has been, cyclical - at least for the 34 years I've been in it and watching it. It's notorious for it's "feast or famine" behavior.
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