Big expectations, but little results…

I suspect that dilution as much as anything may dull the impact of the various stimulus and rescue packages that are trickling their way down to the American public. BY dilution, I mean that what starts out on the evening news sounding like a big impressive number (I’m still easily impressed by billions and billions of dollars), ends up being just a few dollars for a few people, once it gets spread across and diluted by the shear size of our country.

Take out local implementation of the homeowner rescue plan – the Oakland County Homebuyer Program, which I posted about here a week ago with the following:

This just recently announced by Oakland County. Oakland County's Homebuyer Program for Vacant Foreclosed Properties is part of the Neighborhood Stabilization Program (NSP) created by the U.S. Congress in 2008 for the purpose of redeveloping and occupying abandoned and foreclosed homes. NSP is funded through the U.S. Department of Housing and Urban Development (HUD), Office of Community Planning and Development under the Community Development Block Grant (CDBG) Program and locally administered by the Oakland County Community & Home Improvement Division.Oakland County's Homebuyer Program provides loans to homebuyers for down payment assistance, closing costs, home improvements or other financing associated with purchasing eligible vacant foreclosed single family homes located within select participating Oakland County communities. The home must be purchased by the homebuyer as their primary residence. This program can provide assistance of up to 49% of the price of the home, in the form of a non-interest bearing loan that does not have to be repaid until you sell the house.

It sounded wonderful and I felt good about reporting it and hopeful that it would help greatly in our area. But the devil was in the details and those didn’t come out for a few days. Once they did, it became obvious that this program is just too little too late to do much for people in Oakland County. A second article a week later stated that eh program really had only about $5 Million and that they thought that they might be able to help about 200 homebuyers. By that time over 1,000 people had applied.

What happens is a fairly common phenomenon in American life. Some politicians back in Washington pass a law that funds an effort to help. They put in a few Billion dollars, hold a press conference and toss it out the door. Well, immediately people start taking their “scrape” from the pile of money. Of course there must be administrators for the fund and they need to get paid and then it needs to be spread out to all the states which means that they also need administrators and they need to get paid, an so o and so on and so on, until it gets down to your local County or City. By then much of the money is gone and what is left must be spread out as much as possible.

So from the Billions that started out in Washington, Oakland County got 5 Million to actually spend helping people buy houses. I guess a drop in the bucket like this is how trickle-down economics is supposed to work. A drop in your bucket and a drop in my bucket – just so everybody get a droop in their bucket. The politicians can point to all of their hard work in Washington to get that drop for you and me, in hopes that we’ll vote for them again.

Could that money have been better spent on a more focused program that would have more impact? Probably, but then every Congressman from every district wouldn’t have had his or her opportunity for their news conference about how they brought home the money for their constituents. So hold out your tin cup and maybe the splash from the drop in the bucket where you live will put a dab in your cup. That’s it, enjoy your stimulus, and don’t forget to thank your Congressman.