To read the original summary and my thoughts on why this is a bad program go to: Bruce Breslow (State of Nevada) To Purchase Underwater Mortgages
I must have missed this the first time I read through the articles.
According to the Las Vegas Review journal, article here, $100 million of the funds used in the program will be from the treasury department.
Breslow was quoted as saying this will have no cost to the state. While that is technically true it doesn’t mean this won’t have a cost to tax payers.
The treasury doesn’t exactly have a surplus of money to hand out for government programs. Our government doesn’t make any money so they can only tax or print currency. The fiat currency used to pay for Nevada’s Home Retention Program will be from freshly printed dollar bills (electronic transfer of funds these days). My best guess is it’s from QE3 but I’m not an economist.
What happens when the treasury prints currency it can’t back up?
More money printed without a backing of something with intrinsic value lowers the value of the dollar and will end up creating hyper inflation.
So there you go. While this program doesn’t cost the State of Nevada anything it will end up costing tax payers via lower dollar value, higher product prices, and future inflation.
For more information on buying or selling a home in Reno and Sparks, Nevada contact Broker Ricky Beach at (775) 750-1437 or Ricky@Resnv.com