I think that is what is motivating the politics of this: Congress (and the rest of the government, including presumably the Fed) is scared senseless of the consequences of another round of rapid home price deflation. Consumer confidence would plummet, retail sales might well collapse (they are already deeply worried about the upcoming holiday shopping season as consumers are slamming their wallets shut), and this would lead to another inevitable round of layoffs and possibly retail bankruptcies. In short, we are still poised on the precipice of a depression-level economic downturn, despite the 3rd quarter GDP numbers, which were indeed inflated by all the artifical stimulus the government is applying (Cash-for-Clunkers, the home buyer tax credit, and the stimulus program itself).

I think you have painted an accurate portrait here, but my point was that a measure like a homebuyer's tax credit is simply another form of what the American real estate industry--as opposed to the European, Asian, or Australian real estate industry-- has been treated to for many decades. Wasn't the home mortgage interest deduction itself a response to the depression of the 1930s? I could see these tax credits becoming permanent, becoming yet another freebie benefiting mostly the already well off and adding to the national debt. Philosophically, I could support measures like the present if they were in abayance during booms, as Keynes proposed. But these props have become a permanent feature of American life. This is a misuse of socialism or Keynsianism in my book. This is simply counterproductive social and financial engineering, and hastens the day when we are no longer a great power.

So while I generally supported Obama's stimulus programs where they were likely to increase future productivity, production of alternative fuels, repair fraying infrastructure, or train Americans in new technologies, I can't support governmental meddling to prop up over-priced consumption and to actually restore the very bubble which caused the financial crisis. This is criminal.