If every cent of the tax credits Congress is handing out to home buyers were spent exactly as intended, there would still be something unjust about subsidizing the minority of Americans who are buying homes at the expense of the majority who are not. But as it turns out, hundreds of millions of dollars in credits -- which are valued at up to $8,000 apiece -- have been stolen.
Apparently, the legislation approving the credits didn't allow the IRS to require thorough documentation by those claiming them.
"Congress passed a law that made it possible to have the IRS mail you a check for $8,000 if you claimed you were a first-time homebuyer. That's all you had to do -- assert that you deserved the credit. The IRS didn't require you to provide proof that your claim was genuine before your check was put in the mail," noted Kevin Hassett, director of economic policy studies at the American Enterprise Institute.
When the Treasury Department started looking into the question of who had claimed the credits, it found that more than 19,000 claims were for homes that had not even been bought. More than 70,000 taxpayers claimed the credit even though they had owned homes within the past three years, which was supposed to make them ineligible. Thousands of people filed with taxpayer identification numbers rather than Social Security numbers, strongly suggesting some may not be U.S. citizens. And nearly 600 people under the age of 18 claimed the credit -- including a 4-year old!
The total misuse of the program has come to more than half a billion dollars -- so far. Congress has extended the program into next year and made more people eligible.
Graft is, unfortunately, often the result of big, unaccountable federal spending.
Many times when an individual anticipates bankruptcy,he/she will go on a spending binge knowing they aren't going to pay the money back. That's where we are as a country. We are at the end of a three decade long spending orgy where we have far exceeded our ability to repay. No combination of spending cuts and tax increases can save us. We are insolvent, bankrupt,and on life support.
But countries don't go bankrupt,they default outright or monitize their debt and try to start over. When that final moment comes (probably a run on the dollar),it will likely happen as a jolting event and unfold over the course of a weekend. From the subsequent Monday forward,life will be different in America.
All because we didn't live within our means.
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