I am the solution to the housing crisis

Lots of economists can lay claim to impressive theories on how to resolve the housing crisis, but few can actually boast, as I safely can, that they are the solution to the housing crisis. But I don't think I'm overstating my power or exaggerating my influence when I say that for this country to get out of this recession, it needs me to start shopping for a home.

I'm 31, I can easily afford a home, but I rent. It's not that I'm averse to buying a home, it's just that when I compare the cost of renting to the cost of owning, it's clear that I'm better off renting. I live in a loft in downtown Denver; I like it fine, but I don't think I want to live here forever. If I were to buy a condo of comparable quality in a comparable location, my monthly expenses for housing would nearly double. I believe that I can make a superior return on any investment premium that I would potentially allocate to buying a home, and so I rent. It's that simple.

One might argue that I have some sort of patriotic or social obligation to buy, because then I could help resolve the crisis. But if I were to reach a bit and buy just to keep things moving, then I would no longer be a part of the solution. I'd just be another overextended homeowner.

For me to use my awesome power and solve the housing crisis, one of two things must happen. Either the cost of renting must go up to the point where it meets the cost of buying, or the cost of owning must go down where it meets the cost of renting. I'd much prefer the latter, but that would likely happen as a result of further deflation. The federal reserve would much prefer the former, and that's why they're trying to stimulate aggregate demand. Most reasonable folks agree that a healthy 2% inflation is the best for everyone, and I've got no qualms with that. But even if Bernanke miraculously recreates a world of 2% inflation, instead of the brutal deflationary cycle we're in now, that still doesn't make me want to use my power, unless the Fed creates disproportionate inflation in the cost of renting compared to the cost of buying. Since we already subsidize housing with tax credits and tax deductions, the only way to effect this change would be to enact a punitive "renter's tax." This would be nuts-in-a-Fruit-Loops-box crazy, but very little that the government does suprises me anymore. Don't count it out.

Barack Obama and his press secretary, Mr. Gibbs, tell us that the new housing stability bill will not reward speculators. But just because you live in your home doesn't mean you weren't speculating when you bought it. Buying a house is almost by definition speculative. Why would anyone agree to pay 3-10 times their annual income to buy anything, when the same product could be obtained for considerably less, unless they believed (speculated) that it would produce a net financial gain (a profit)?

The unraveling of this crisis has serious ramifications, and Barack and his friends are not irrational to try to come up with solutions to deal with it. But, unfortunately for them, they don't have the power to solve the problem. All they can do is to subsidize last year's speculators. I'm the only one who has the power to solve this problem. But I'm not going to solve it until I see a house I want at a price that makes sense. Unfortunately, thus far, I haven't seen anything that's even close.