California may be broke, but that isn’t stopping legislators from trying to give away more money to try and save our swooning housing market.

Qualified buyers of new homes in California can currently receive a $10,000 tax credit for purchasing a newly constructed home. The program, originally capped at $100 million and set to tun through March of next year, according to the Wall Street Journal, is running dangerously low on funds. Never fear, the spend-happy politicians in Sacramento are looking to allocate another $100 million to the efforts — $21 billion budget deficit be damned.

According to Senator Bob Dutton, a Republican who sponsored the expansion bill,

“We didn’t realize how successful [the tax credit program] would be.”

Is it odd that a program can be called a success for the mere fact that it ran out of money almost a year too early? And if the chart above of new home sales in California is any indication, we should be very worried if the continuation of this bill is as “successful” as it was the first time around.

This entry was posted on Monday, June 29th, 2009 at 8:00 am and is filed under Mortgages, Regulations. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.