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Buy a Home, Get a Green Card


A modest proposal to solve the housing crisis.

This last Tuesday, the Wall Street Journal published an op-ed by my friend Gary Shilling and Richard LeFrak. They offer a simple solution for the housing crisis: Give green cards to foreigners who come to the US and buy a home.

This is a very important proposal, and one that deserves national attention and action. Gary was kind enough to send me 2 lengthier white papers offering more facts. And while this proposal may be somewhat controversial in some circles, I ask that you read it through. I'll also add a few thoughts as to why this could not only help solve the housing crisis, but help put the nation back into growth mode.

Longtime readers know that I've been growing more and more bearish of late. I've been writing for a long time that we're in for a long period of slow muddle-through growth, as the twin crises of the housing bubble and credit bubbles require time to heal.

This is a serious proposal for cutting the time to healing for at least one of those bubbles (housing), and to at least keep the other (credit) from getting worse. The US is already allowing roughly 1 million immigrants a year into the country (which for a variety of reasons, I, and most serious economists of all stripes, believe is a very good thing).

I'm suggesting we simply change the nature of what constitutes the conditions for acceptance, so as to jump-start the housing industry and the economy. I'm not suggesting additional immigrants, although nothing would be wrong with that.

Let me put upfront a few benefits of a program that would allow legal status to immigrants buying a home. Housing values would stabilize, and in many cases, rise. The massive losses because of bad loans that are being subsidized by US taxpayers would be stemmed, saving many hundreds of billions, if not a trillion or more dollars. The excess inventory of homes would quickly disappear, and the millions of jobs that were lost as home construction fell into a deep depression would come back.

If housing values rise, many families would be able to refinance their homes at lower rates and have more income left over after paying their mortgages. $12 billion in commissions would end up in real estate agents' pockets, helping a very battered and bruised group. Hundreds of billions will flow into local businesses, as these new immigrants will need to furnish their homes.
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