The road to recession

The so called Republican tax cut will point us to recession and not the growth they are promising. By capping the mortgage interest and property tax deductions on homes, it will dampen higher prices in areas with higher local taxes. The real estate industry is strongly against this part of the Republican tax plan.

Higher after tax carrying costs will cancel out many or most of the alleged tax cuts in other parts of the bill. They will weaken bids on home prices as first time buyers especially have to factor these costs into their budgets. Banks will have to make the same adjustments for how much mortgage should be offered at each level of income.

Americans have always considered home equity to be like a savings bank. Weakening home equity is like robbing the bank. It will mean less ability to borrow on second mortgages for vehicles, college costs and other spending. This weakens the economy toward recession.

Why Republicans are so irresponsible is beyond understanding. TrumpĀ  has his mental issues and is ignorant of economics (building skyscrapers and golf courses is not economics nor is bankrupting gambling casinos) so his behavior is understandable. For more on this incompetence click here. And here.

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