Well, this is one thing I’ve never heard before.

In the final paragraph of an article in today’s WSJ, past-Fed chairman Alan Greenspan throws out this clever idea.

Greenspan Sees Bottom In Housing, Criticizes Bailout – By David Wessel, The Wall Street Journal

Mr. Greenspan urges the government to avoid tax or other policies that increase the construction of new homes because that would delay the much-desired day when home prices find a bottom.

He did offer one suggestion: “The most effective initiative, though politically difficult, would be a major expansion in quotas for skilled immigrants,” he said. The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting more skilled immigrants, who tend to earn enough to buy homes, would accomplish that while paying other dividends to the U.S. economy.

He estimates the number of new households in the U.S. currently is increasing at an annual rate of about 800,000, of whom about one third are immigrants. “Perhaps 150,000 of those are loosely classified as skilled,” he said. “A double or tripling of this number would markedly accelerate the absorption of unsold housing inventory for sale — and hence help stabilize prices.”

I suppose there are worse things we could do than increase the number of smart people coming into the US and buying things.

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