Back when the economic stimulus bill was being debated in February, there was talk in the Senate about a $15,000 tax credit for all home buyers. In the end, the idea was relegated to the trash heap and the $8,000 first time home buyer tax credit was adopted. But the idea of a massive tax credit for all home buyers didn’t die. In fact, it’s up for consideration in the Senate again, as its own bill. CNN Money reports on Senator Johnny Isakson’s (R-GA) rationale for another home buyer tax credit:

“The first-time home buyer tax credit has made a difference,” said Isakson when announcing the bill. “First-time home buyers used it and the market stabilized, but we don’t have a recession in first-time home buyers. We have a recession in the move-up market.” Continued the senator, “One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can.”

He’s probably right that such a tax credit would help stimulate the housing market further. But what about the potential for another bubble? That is a very real concern right now. What good if housing prices rapidly inflate again, only to deflate as soon as demand drops when the tax credit disappears? By targeting only first-time home buyers, there is an argument that the current tax credit limits the possibility of a true bubble forming.

It will be interesting to see what happens going forward. If the $15,000 tax credit passes, and if it ends up with the same rules as the current tax credit, allowing for use as a down payment, I might decide to buy a new home…