Taxpayers to Foot Homebuilders' Losses?

Source : Web Posts

As people rubberneck the Bear Stearns (BSC) demise, one of the most questionable legislative moves in the modern era is getting rammed down taxpayers' throats without nary a peep by the mass media.

I'm talking about the proposed loss carryback provision, which would allow homebuilders to recover taxes paid during the bubble years by offsetting the income with the losses they're incurring now.

In essence, taxpayers will give back to the Robert Tolls (Toll Bros. (TOL)) and Ara Hovnanians (Hovnanian (HOV)) of the world millions of dollars to prop up their closely held companies, i.e. companies in which they have majority interest and/or control, whose stocks these individuals had the magic foresight to dump by the millions of shares right before the whole Ponzi scheme collapsed.

If ever there was an action that should undermine investors' confidence in the U.S. market system and reinforce the view that the government exists to grease the palms of those who pay their way into influencing the government, this is it.

This topic definitely seems to be actively debated, tossed around, beaten up and worked on so may be I'll throw in my little rant as well and help the home builders. It will be interesting to see what it will really mean in the end. It most likely will be a "dud" - something you can launch but it just fails to fly - Overall what's the tangible benefit to the tax payer to help the home builders when they are in "pain"... yes we'll help reduce the pain... but what do we get in return from you.. oh rich home builders or beggars shall I say if you need a hand out ... Are you going to be making cheaper homes... heck no.. it don't make good business sense to you right?

A $10k-20k tax credit over 2 years isn't going to make any "sane" tax payer run out and buy an overpriced home - the subprime borrower is already in or packing up now - for now we've given them a $2 million debt forgiveness from the IRS so they can get out of the debt trap.

The entire subprime ponzi scheme is over and it's busted now - thanks to the great efforts and skills - home builders packed one too much junk through the machinery all at once as fast as they could - with the entire financial structure around it in shambles and tatters - you can squeeze the system but it ain't gonna give anything but pain across the board (the cash cow cannot be milked anymore - it's been milked so much that the cash cow is really-really sick fighting for survival because you fed it too much garbage and it is being operated upon by Benny boy and Paulson daily along with various checks performed by interns at the fed hoping and praying it will just get or feel better - thinking it will spring back to it's prime and do a little sprint - yeah right... good luck - you should know better) - Home builders just hang in there and sit tight with the money you made in the good days and when the cash cow gets better we'll slowly let you near it to try to milk it again :)

I'd propose a slight variation of the rule... The loan loss provision will be given only to home builders that demonstrate they did not make a subprime loan in the past 3 years i.e. if you did not contribute to the mess and were just caught up... we'll help you however you'd have tough luck finding such a dumb "home-builder".