Herbert’s flip on stimulus is unwise

Gov. Gary Herbert says it’s time to hit a second home run in the housing industry. The successful program started by former Gov. Jon Huntsman Jr. to allocate $10 million in stimulus funds to give first-time home buyers a $6,000 down payment is being copied by the new governor. Herbert’s plan is to give $2,000 to $4,000 to Utahns who buy a new home before the money runs out.

This comes as no surprise because Herbert is a real estate guy. Shortly after leaving the National Guard, he created a successful real estate firm, Herbert and Associates Realtors, and served as president of the Utah Association of Realtors.

“We know from experience that the creation of new homes does more than just benefit developers and contractors,” Herbert said. “It revitalizes broad sectors of the economy, from painters and plumbers and electricians to decorators and furniture shops and specialty stores. Programs like Home Run are the best use of our economic stimulus dollars because they put people back to work.”

I thought people were already back to work from the last government spending spree. The saddest part of this package, besides the governor’s impaired ability to look beyond the housing market, is that he doesn’t have a backbone.

Angie Welling, the governor’s spokeswoman, said Herbert is “against the federal stimulus package in theory, but it happened and it would be foolish at this point to turn that money away. He might as well make the best of it for purely stimulus projects, creating and saving jobs.”

If the governor is truly against federal stimulus money, he shouldn’t spend it. This is no different than saying you are against adultery, yet still sleep around (no, I’m not implying anything). His political maneuvering is scary because it clearly shows he is comfortable saying one thing and then doing another—whatever it takes to keep the votes coming in or padding the pockets of old friends in the real estate market. This is every politician’s plague.

Taking a page from Herbert’s book, this money could have been well spent in several other productive ways. Housing already had a shot in the arm with the first stimulus check. How about taking a look at improving health care options or extending unemployment health insurance benefits, road and transportation projects, or better yet, education.

There is a saturation of new homes. That’s why builders are struggling. There are a lot of people with older homes that want to sell. Perhaps builders should adjust to market conditions rather than further saturation.

In February, the Legislative Education Budget Committee was talking about a 17.6 percent recommended cut to Utah’s education budget for the 2009-2010 school year. Because of a separate federal stimulus bailout of $298 million for public education in Utah, the 2010 budget now only faces a 6 percent cut. Thanks, Uncle Sam.

Spending federal stimulus money is going to hit us hard across the head in the form of higher property taxes, income taxes and inflation because the government will have to do something to tackle the expected $9 trillion deficit. Rather than burdening value producing businesses and individuals with heavy taxes, the incentive should be to let them keep their money. The best way to stimulate the economy and create jobs will be through the efforts and innovation of hard-working individuals without government interference.

http://www.dailyutahchronicle.com/opinion/herbert-s-flip-on-stimulus-is-unwise-1.1872226