Sources: Autoblog, Wisconsin Ag Connection
quote: I already own a house. If my house is worth $300k and I sell it tomorrow and get $300k for it, I can buy a similar house for a similar price. If we tore down a bunch of old houses to reduce supply and it raised the value of my house to $600k, it doesn't really hurt me since I can sell my house for $600k and then buy a similar house for $600k.
quote: However it hurts those who are looking to buy their first house. If they're having trouble securing a loan to buy a $300k house, how in the world will they afford a $600k house?
quote: By the same reasoning, I can create jobs and improve my local economy by littering. Since someone needs to clean up the mess, I can create jobs by dumping my trash on the ground. If I dump enough trash on the ground, everyone in my town can be employed picking up my garbage.
quote: The same thing goes for Cash for Clunkers- people that couldn't afford a new car but could afford a cheaper used car were suddenly priced out of that market, too, since the price of used cars went up.
quote: Heres where you analogy falls apart: A ~$500k house in NY equates to about ~$250k in Florida, due to cost of living adjustments. So you sell your house in NY for ~$500k, purchase a ~$250k house in Florida, and boom, sunny beaches, no income tax, and +$250k in your bank account.
quote: That's free market economics in a nutshell. Demand goes up, supply decreases, price spikes, business hires, production increases, demand settles down, new equilebrium reached, with a slightly higher employment rate. Rinse and repeat as needed.
quote: It really is like a sub-par engineer trying to create a perpetual motion machine. In a futile effort to override the fundamentals of physics, the engineer makes the system more and more complicated until it confuses him into thinking it will work.