October 02, 2008

Dear Nancy Pelosi

Dear Speaker Pelosi,

The house I am living in has been a rental for more than a year because my landlord can't find a buyer. My wife's boss is stuck with two houses and can't sell his old one. My brother-in-law sees plunging prices and cannot risk buying a house for his new family. My plumber can't pay his bills because he hasn't been paid for the last house he helped build.

Here on "Main Street," the actual problem is obvious: the real estate market is frozen.

Instead of buying up bad debt, please consider giving direct support for people buying homes. Instead of supporting credit derivatives or mortgages, the government should support house purchases directly.

A one-year tax deduction of up to $200,000 spent on direct purchase of a home would close the gap between buyers and sellers and get the real estate market moving again. It should be a tax deduction on a house, not a deduction on a loan - we do not want to dig ourselves into more debt.

A tax deduction on houses would not reward financial alchemists who are playing with derivatives. It would help people working hard to put their family into a home. It would help sellers get rid of their debt, and make houses and mortgages possible to value. And it would give the bankers time to unwind their truly bad loans in an orderly way.

The current bailout proposal does not make sense to people like me. Buying up bad debt from banks does not help us buy or sell our actual homes. If all you do is pass this Wall-Street-bailout bill, in a few months we will be back here again dealing with a still-frozen housing market. Please help Main Street instead.

Posted by David at October 2, 2008 06:36 AM
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