There was a thought experiment the other day on CafeHayek.com.  I thought of a fourth scenario.  Have government build something besides houses, if people don’t actually want houses.  It still helps the construction industry, it creates the demand (by decree) and actually creates value.  If it’s hard to come up with enough projects, fine.  But, you could have municipalities and companies create some of their own proposals, which they could do if you gave them a year or so.

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