Mar 29, 2004
In recent campaign speeches in New Mexico and Arizona, George Bush bragged about the record rate of home ownership in the U.S. as a sign that his tax cuts are helping the economy.
It's a statistical game. From one administration to the next, home "ownership" has usually gone up. The question is, however, what does home ownership mean?
Saying that people "own their own homes" hides the fact that most people take on 30 or 40-year mortgages to finance their home purchases.
In recent years, however, "home ownership" has been threatened by ever increasing debt. People are even refinancing their mortgages, using the equity that they had paid into their homes to get out from under other debts for a while. Credit card delinquencies and personal bankruptcies are at all-time highs.
This is not because people spend too much it's because wages aren't keeping up with our fixed expenses.
Bush makes it sound like there is a "boom" going on in home ownership. There is a real estate "boom" going on, of sorts. But increased home buying is not really part of this "boom." The "boom" includes a great deal of speculation in commercial real estate.
With the drop in the stock market in recent years, investors sought more profitable places to put their money. And tax policies have encouraged investment in commercial real estate.
Just as the stock market bubble eventually burst, so can the real estate bubble. Already there are countless strip malls with stores standing empty. And the jolt caused by the real estate bubble bursting can spill over into job losses and then more homes lost. Already, foreclosure rates are at near-record levels.
Bush has the nerve to use the figures on "home ownership" to brag about an improving economy. The debt lurking behind that ownership tells the real story.