Slathering More Moral Hazard Onto The Culture: First-Time Home Buyers Tax Credit

Calculated Risk: WSJ: IRS Examining Many Suspicious First-Time Homebuyer Tax Credit Claims

So, if the new homeowner doesn't have a tax bill over 8K, and buys that house for the first time, the guv'mint sends him or her a freaking check! Not a carryover of tax credit into future years, as is usually done, say, when a large loss is sustained by a taxpayer.

They send Joe or Jane Homeowner a check. They can take it to the bank, cash it, and put it in their pocket.

The potential for fraud, up and down the line of the home sale transaction is huge.

All to keep the real-estate market pumped up a few more months.

Even admitting fraud exists, the realtors want to extend the program, and expand it!

A spokesman for the National Association of Realtors, Lucien Salvant, said, "Any time there is a lot of money around, there is going to be people attracted to it with evil intent."

Housing-industry officials recently have stepped up their lobbying for an extension of the credit. In a letter to the Obama administration on Monday, the National Association of Realtors, the National Association of Home Builders and the Mortgage Bankers Association called for a 12-month extension of the credit. They also asked that the tax break be extended to all home buyers -- not just first-time purchasers -- and noted that they were urging Congress to expand its value.

Heaven help us.