The housing crisis has created more pain for middle class households in American than most crises in recent decades. As household wealth declines, consumers hold on to their pennies, waiting for things to stabilize before spending. But will providing taxpayer money for refinancing underwater homes do the trick to jumpstart the economy?
AEI’s Ed Pinto thinks not. His incredibly common sense statement, “Jobs create demand for housing, not the other way around,” sums it up quite nicely. As he points out, each dollar going toward a refinancing program is a dollar taken from someone else, reducing their spending, and leaving us without much bang for each buck.
Pinto suggests reducing the corporate tax rate as a better way to trigger job creation, a strategy I mention at length in “The Road to Freedom.” What else can we do to create jobs? Learn more here.