How effective are the Bush tax cuts at creating jobs?

[mrstickball]

richardhutnik said:

HappySqurriel said:

This analysis says nothing because there are far too many factors that haven't been accounted for; and the timeline is too short with arbitrary start and end points. To understand what I mean just consider the real-estate bubble that began inflating in the Clinton years and continued through the Bush years, and finally burst right at the end of G.W Bush's last term; there is no reference to how many jobs were "created" or crowded out by this bubble, and you have provided no argument for the level of influence Bush's tax cut policy made in isolation from this bubble.

 

I believe the real estate bubble happened after the dotcom bubble, as money began to seek out the next investment opportunity and piled into the real estate sector with far too much funds.  This then fed on itself.

Anyhow, in regards to this, there is a question, and it is fundamental to economics on where the money should go, to handle situations that aren't in anyone's control.

You'd be wrong.

The bubble has been around for quite some time. The bubble was created when government, business and people got too greedy and wanted to own more homes than the economy would allow. The bubble started growing due to changes in incentives which were a part of the Community Reinvestment Act, among other things.

It wasn't about money getting invested into real estate, which caused the artificial inflation. It was that the government (along with the investment brokerages that hid the toxic assets, and the public that were greedy and bought houses with no money down) decided to incentivize home ownership for those that, quite frankly, had no business owning a home.

Here's the chart:

Let me elaborate on why having a too-high home ownership rate is bad:

I am a landlord. I own 2 properties - a single family house, and a 5-unit apartment complex. I plan on buying more in the future, should my funds allow. The thing I've learned is that there are simply a lot of people that do stupid things, and are not capable of home ownership - either due to poor financial management, bankruptcy, lack of income, or otherwise. If the government, banks, or anyone tries to artificially inflate the number of people owning a home, they place an undue burden on the number of people at risk for bankruptcy, as the cost of home ownership rises as supply falls, which causes price to rise, thus requiring more money become comitted to owning a home.

Comparatively, renting is an outlet for people that cannot own. Unfortunately, as a landlord, I've run into MANY people that couldn't own a home, or even be good renters...Yet I know that some of these people wound up getting loans to buy houses that were too large or costly for their sporadic income or poor financial management skills.

I don't know where the rate of 'natural' home ownership lies, but I do know that having it rise by 5% over a 10 year period is a scary thing, given that the median has been around 64-65% for the past 50 years.