Politicians, especially Democrats, often face two major problems: they are out of touch with reality and they misunderstand fundamental economics. Unfortunately, their supporters often believe these fallacies, which leads to support for policies that are at odds with their intended goals.
Take the current housing crisis for example: home prices are becoming increasingly unaffordable. NBC News estimates The U.S. housing affordability gap is nearing its highest level in a decade, driven in large part by a massive housing supply shortfall.
It is not the government's job to build housing. It is the government's job to remove obstacles to housing construction.
After the boom-and-bust cycle of the Great Recession, home construction declined dramatically.You own nothingEstimates of the housing shortage range from 2 million to more than 7 million units, according to sources including the National Association of Realtors, Zillow and Realtor.com. These figures likely don't include the additional housing needed for the millions of undocumented immigrants who have entered the country under the Biden-Harris administration.
On top of this, cash-rich institutional investors are pushing home prices even higher, sending them spiraling out of control.
Kamala Harris knows that housing affordability is a huge problem for the middle class and has made it a central issue of her campaign: Her proposed solution to the housing affordability crisis is to make housing more affordable.
It's weird that after a housing crisis, the government still has to explain the problems caused by artificially stimulating demand, but that's the reality. Harris proposes giving new home buyers a $25,000 tax credit to help them buy a home, at taxpayer's expense, of course.
Anyone with a basic understanding of supply and demand can see the flaws in this plan: the housing market is relatively fixed and in short supply, so prices will only go up as more buyers with money to buy livestock become available. No amount of clever thinking can make rising home prices actually “more affordable.”
But waitHer supporters say: And more! Kamala has pledged to build an additional 3 million homes.!
The image of Kamala Harris dressed like “Bob the Builder” is amusing, but who would think she's actually building any housing, let alone 3 million?
It is not the government's job to build housing. It is the government's job to remove obstacles to housing construction.
butHarris supporters protest She will partner with the private sector.!
Well, we've seen that movie before, and it didn't work out so well: Of the $7.5 billion the Biden Administration allocated to building electric vehicle chargers (much easier than building a house), a whopping total of eight (that's not a typo, eight!) chargers have been built so far this year.
The senators also sent Harris a letter dated Sept. 18, addressing her role as a “broadband czar” to bring internet connectivity to underserved areas, a project that has reportedly achieved little despite $42.45 billion being allocated for it.
So how exactly is she going to build 3 million more homes? I'm more confident Kamala Harris will find penguins in the desert than she will add 3 million homes to the existing housing stock.
The National Association of Home Builders estimates that government regulations add about $94,000 to the cost of an existing home. While government certainly has a role to play in removing barriers to building new homes, Harris offers no solutions to these.
Trying to solve the problem by making it worse is a typical government attitude, and Kamala Harris predictably repeats it. Government only creates more government and dependency, not more housing, which are barriers to success and opportunity. Kamala Harris' proposals show that nothing she proposes will change that.
