Economic stimulus solutions include tax-deductible down payments, Flex-Fuel laws and trips to Mars

Congress is currently debating an economic stimulus package that would spend nearly a trillion dollars on measures of doubtful timeliness and efficacy. Here are three ideas on how to really hit the target much quicker, harder and for a lot less.

1. To resolve the credit crisis, make all down payments on house purchases tax-deductible. The credit crisis has been caused by a collapse of the housing market, which has made trillions of dollars of mortgage-backed securities held by major financial institutions worthless. This can be rapidly remedied by reboosting the housing market, which a tax deduction on all (not just first-time buyer) home purchase down payments would effectively do.

With house values restored to reasonable levels, there would be no incentive for people to run out on their mortgages; even if they couldn’t make their payments, they could save themselves simply by selling their homes. New home construction, and thus millions of jobs creating real wealth, would also be mobilized by adequate house prices, and new mortgages would tend to be much sounder, because people would be encouraged to make larger down payments to take advantage of the tax break.

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