The government cannot solve the housing problem by spending | News, Sports, Jobs

The Harris campaign proposes assistance with the down payment for home purchases – up to $10,000 for first-time buyers and up to $25,000 for first-time homebuyers.

There are at least two reasons why every American should be deeply skeptical about the feasibility of this proposal.

It should come as no surprise to anyone reading our editorials that we have serious concerns about the impact of this level of spending on the annual federal deficit and the $34 trillion in debt that that deficit continually adds to.

We realize that we may be overly repetitive on this issue: but it is necessary. We firmly believe that national debt and budget deficits should cause more fear for the future of our country – more concern – than any other problem facing our country.

Our spending levels are simply unsustainable. And this proposal exacerbates a terrible problem.

Second, there are legitimate concerns that all this spending to help people buy homes will have either a negligible – or, worse, a detrimental – effect on housing affordability once financing is completed.

When people and businesses in the process of selling their homes know that the government will contribute $10,000 to $25,000 to a potential buyer, there is a very real risk that sellers will simply inflate prices by as much as $10,000 to $25,000.

The potential downside is that homes will become even more expensive for families who are not eligible for the support but still need accommodation.

There is a strong argument to be made that tuition fees have followed a similar trend over the past few decades: as the government spent more and more money on student loans and grants, tuition fees rose much faster than other goods and services.

We recognize that the Harris campaign’s proposal also contains some promising ideas – although we find the more promising parts lacking in detail. Reducing the red tape and bureaucratic hurdles to building new housing would do much more to improve market affordability.

We hope that in the coming weeks, campaigns in both parties and in all offices, from the presidency down to state legislatures, will focus on these more practical ideas and abandon the ridiculous notion that government at any level can spend its way out of any problem.