President Obama approved the expansion and extension of the homebuyer tax credit initially included as part of the economic stimulus package and set to expire at the end of November. While this move is intended to spur home sales, many experts argue that extending the tax credit is bad policy.
Ted Gayer, senior fellow and co-director of Economic Studies at Brookings, says the credit is a poorly targeted subsidy that is very expensive on a per new home sale basis, and adds to the deficit. Additionally, he argues that the tax credit helps turn renters into buyers and fails to address the main problem of an excess supply of houses, which may contribute to worsening conditions in the rental market.
On Wednesday, November 11, Ted Gayer and Politico Senior Editor Fred Barbash were online to answer your questions about the homebuyer tax credit in a live web chat.
