Tax break for homebuyers?

I'm not sure I understand the proposal, but here is what the NYT says:

The Senate on Wednesday voted to expand the economic stimulus package
with a tax credit for homebuyers of up to $15,000, a provision
championed by Republicans as addressing a root cause of the recession.

Like Arnold Kling, I wish to shift the economy out of housing, not into it again. I also believe that the supply of homes is relatively elastic right now.  The tax credit will subsidize the new buyers without propping up the price of homes.  Demand will go up, supply will go up, price will stay more or less on the same trajectory, and banks won't be any healthier.  The subsidy goes to new home buyers and why should we be helping them above all others?  Aren't they relatively wealthy on average?  (Not that there's anything wrong with that.)  Aren't some of them the dreaded "flippers" and speculators for that matter?  (Can we really enforce the primary residence requirement?)  Do we really want to push people into being less diversified and less geographically mobile in the labor market?  And here's Alex's post from earlier today.

There's a whole other debate you could have on whether we should be encouraging people to buy outputs which are already produced.

So far I say boo to the Republicans.  It could be I don't understand the proposal; if that is so please correct me in the comments.  Here are further discussions of what is going on.


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