Bush Takes Credit for Home Ownership

Once again, Bush is going out of his way to take credit for some good news, despite a complete lack of evidence to show that he had anything to do with it. This is, of course, simply the counterpart to his “It wasn’t me” mantra that he recites whenever anything bad happens.

This time, the good news has to do with home ownership in the US. (I’ll go with Bush’s assumption, which is not obviously true, that higher rates of home ownership are automatically good.) In his weekly radio address this morning, President Bush claimed credit for the nation’s rising rate of home ownership:

In our growing economy, more Americans can afford a new home. Incomes are rising. The unemployment rate is falling. Mortgage rates are low. And because of tax relief, Americans have more to save, spend and invest — and that means millions of American families have moved into their first homes.

Let’s take a moment to think about this claim that “because of tax relief… millions of American families have moved into their first homes.” The median home price in the United States in 2003 was $170,000. (Source: National Association of Realtors.) Suppose that this median home is typically purchased by a family at roughly the 60th percentile of income, which means that they would have had an annual income of about $50,000. (Source: Census Bureau.) The effect of Bush’s two tax cuts combined is estimated to be a total of $834 for a family earning $50,000 per year. (Source: Tax Policy Center.)

Does it seem likely that an extra $834 would make that typical family choose to buy a house instead of renting? The annual payments (mortgage, insurance and taxes) on the median house would be about $14,000, and a typical ten percent down payment would be $17,000. Compared to these figures, it seems a bit of a stretch to argue that an extra $834 was enough to cause “millions of American families” to decide to buy a house for the first time. (Imagine: “We have $16,170 this year to put down on a house, but just can’t quite make it to $17,000… so I guess we’ll just have to keep renting.”)

For more on just how ludicrous it is for Bush to take credit for increasing home ownership in the US, take a look at the chart below. It gives some historical context on the statistic that Bush is trumpeting so loudly.

(Source: Census Bureau.)

He is quite correct that the rate of home ownership in the US is “the highest ever.” But that reflects an ongoing trend, not something newly created by tax cuts. In fact, Bill Clinton could have made the same claim nearly every year of his presidency, despite the fact that taxes were increased in late 1993. Can you see a correlation between tax cuts and rising home ownership rates? I can’t.

But of course, I guess we already knew that having facts to support his assertions is not particularly important to President Bush. Especially if he can dodge responsibility for something bad that happened, or take credit for something good.

Kash

p.s.: While he’s at it, perhaps we can suggest some other good things that Bush can take credit for. Infant mortality has fallen in China since he took office; thank the tax cuts! Two advanced rovers have successfully landed on Mars since he took office, and they’ve even found evidence of water; thank the tax cuts! The price of high definition televisions has fallen a lot since Bush took office; thank the tax cuts! Wow, who knew that tax cuts could do so much…