AM I stupid

or are all the talking heads ignoring one way to save, well not save, but at least stimulate the economy while also potentially strengthening the housing market? My idea is to purchase houses on the open market and begin tearing them down. I don't care how you do it, you could buy foreclosures or REOs or whatever. Then just strip the fuckers bare and tear them down. I don't remember a lot from economics back in college, but I remember supply and demand and our problem right now is we have a ridiculous excess of supply and demand has fallen to historically low levels. This low level of demand is exacerbated by the sudden return to sane underwriting practices and also by the fact that people are scared to buy a house that will instantly be worth less than they paid.

So, then we tear the fucker down, as so eloquently stated above. This does 2 things, the way I see it. It supports the contracting/construction community, which has been pummeled over the last couple of years and has lost hundreds of thousands of jobs. The other is that by reducing the # of homes on the market, you can start to establish a floor under the price of housing and give people some certainty that their house will not be instantly worth less than they paid.

Just a thought, but here are my numbers which are VERY loosely based on some googled numbers and may not reflect reality.

We have 100 million homes in the U.S. give or take.....of that, probably 20% or so are for sale at any given time, so approximately 20 million homes. In the US, per the most recent Case/Shiller numbers, the median price for a home is around $200,000. I'll use $300,000 to make the number more realistic, but I'm also going to say that number includes the cost to tear down. I'll assume no recovery from the stripping of the home of things like fixtures, cabinets, HVAC units etc. I'll assume any recovery covers the cost of stripping it out.

300,000homes x $300,000/home = $90,000,000,000. We still have over $400Billion available in the TARP that our good friend Mr Paulson doesn't want to use at the moment. What better way to support the economy than this? Yes, it's a total writeoff, and that money will have to borrowed. Do you really think that we are going to recover a lot of money from TARP anyway?? Cuz if you do, I need some of what you're smoking.

anyway, that's my thought of the day.

Later