Saturday, August 28, 2010

The Most Expensive War in History

Our nation is wasting an incredible amount of productive resources to fight a battle that has become distasteful to many in our population. At one time this war was cheered as patriotic, but with the massive increase in expenditures and mind boggling waste, many are becoming resentful of our American government’s presence in an area where it does not belong. Even if we stopped the war now it will have a lingering effect for generations.

Of course I am talking about our government’s War on Affordable Housing.

Today many young families must purchase homes for 6 times their household income. This is compared to their parents that bought homes at 3 times their household income 15 years ago and their grandparents that purchased at 2 times their household income.

The government has spent trillions of dollars through subsidies, tax breaks and direct market manipulation of interest rates in an attempt to make housing prices unaffordable for young families that want to enter the real estate market.

Our War on Affordable Housing dwarfs the resources that are presently being spent on the War on Drugs or The War on Terror.

Many are starting to question whether this is the proper battlefield to expend the limited resources of our nation.

An assault that might be more justified would be a War on Unemployment, like Roosevelt funded during the Great Depression He employed millions of workers to build things. This program constructed Hoover dam and much of the infrastructure in our National Parks.

How about a War on Outsourcing? This engagement would fight all of the crazy tax breaks that allow companies to send jobs overseas and would replace them with subsidies to hire workers at home.

The only thing that we must consider is that if we stopped the War on Affordable Housing and used those resources to fight a War on Unemployment and a War on Outsourcing at the same time, it could cause massive problems in our economy. Our unemployed labor pool would shrink to zero as the sale of fairly priced homes would quadruple. This would cause the biggest economic boom in our nation's history. We would then be forced to start a War on Employment to counteract the unbridled prosperity.

The biggest problem with the War on Affordable Housing is that prices are always being pulled toward affordability. The market trends in line with historical fair value in the long run no matter how much money is expended to manipulate the free market in the short run.

On top of the trillions that we have already spent, our government will have to spend many hundreds of billions of dollars a year, forever, to continually battle the forces of the free market to keep homes unaffordable for new families entering the real estate market.

So the War on Affordable Housing appears to be an extremely expensive fight that we can never win.

Also, understandably, it is fast becoming an unpopular government policy for our younger citizens who can't afford to buy a home because of the high taxes they have to pay to continue fighting the War on Affordable Housing.

But the War on Unemployment or the War on Outsourcing would be supported by everybody. Either battle would only be temporary. And both are 100% winnable.

The best part is that our nation will be able to win a war for the first time in a very long while.

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