To make the most of an expanded program, we urge two other changes. First, any extended credit should also be time-limited: Lest this sort of subsidy be viewed as some sort of entitlement, it should expire at the end of the year. That way, prospective buyers will be tempted to jump in now, when the economy most needs the boost.
Second, buyers should not have to wait until they receive their return next year to be reimbursed.
The federal government should make the value of the credit available to them the day they close on their new home, ensuring that a small gap in a family's cash flow does not serve as a barrier to buying a home.
None of us can doubt that getting banks lending is a worthy goal as the president leads us out of recession. But even as other economic catastrophes - bankruptcies, bonuses, and bailouts among them - dominate the headlines, we ought not lose sight of the fact that the housing market has so frequently led the rest of the economy out of a downturn.
Getting everyday homeowners buying again could lighten the load on the rest of the economy. And that would leave Washington more room to focus its attention on more drastic, if not pressing, challenges elsewhere.
Paul Weinstein Jr., a professor at the Johns Hopkins University, and Marc Dunkelman ( mdunkelman@dlc.org) are senior fellows at the Democratic Leadership Council.
