Housing stimulus programs are history. Home buyer tax credits are water under the bridge. Still, they're part of explanation for why we're where we are, economically speaking, trying to extract ourselves from a funk the likes of which only those who lived through the Great Depression can remember.
Here, the Atlantic's Daniel Indiviglio tries to shed light on the distortive effect of the home buyer tax credit on reisdential investment, and therefore, the economy, by regraphing the quarters and pulling out the stimulus' impact.
Indiviglio's chart takes actual
" GDP growth (red) and then imagined what GDP would have looked like without the credit (blue). In my estimate, residential investment dropped to $321 billion in the third quarter of 2009 -- where it fell to when the home buyer credit was removed last summer and has hovered around ever since.
Here, you see that the third quarter of 2009's pop looks a little weaker. But growth looks better in most of the quarters that followed -- especially the third quarter of 2010, during which time the big fall in residential investment due to the credit's expiration cut GDP.
Better home sales would have had some effect on other aspects of GDP as well -- but just like you're seeing here, removing those effects in later quarters would have created an adverse effect."
Like other important economic events, we'll need more history to run its course before we'll be able to say it's positive or negative.