No Crap-ola

Eliminating mortgage interest deduction would lower home prices and increase home ownership.

As soon as I started looking into houses, I figured this out. The way people buy houses is they look at how much they can borrow, add that to the down payment, and then see how much house they can afford. The Mortgage Interest deduction factors into the "how much they can borrow" section and increases how much people can pay. When I was buying a house, I would've preferred higher interest rates AND no mortgage deduction, because it would've driven down the price more and my monthly would've been the same. But of course, now that I'm in a house, I prefer the housing prices to remain high (although I don't actually get to capitalize on those gains in any way).

In slightly other news, I heard on a radio program the other day that when employers auto-enroll employees in 401k plans (a darling "nudge" idea), those same employees end up increasing their consumer debt. Shocking news that money is fungible, ie if it goes one place, it cannot go to another place. So, the "nudge" people claim their policies work because people save more for retirement, but the fact is - they are the same and maybe even worse off because they have more consumer debt! What geniuses these architects of human behavior are!

I believe laws should be written to be simple, clear, and fair. Not to promote "values," as more often than not, they end up backfiring. Just think about the home ownership example. Mortgage interest deduction is meant to encourage home ownership as a path to wealth. Instead, it makes home ownership less likely, more stressful, expensive, and in actuality works as a simple wealth transfer from non-home owners to existing home owners.

We should hire game designers to write laws, not ideologues.