Let’s Stop Whining About the Mortgage Interest Deduction
As congress and the Administration begin considering the new budget, there have been loud cries in opposition to cutting what some consider “sacred cow” programs, such as the mortgage interest deduction, social security, and subsidies to farmers and business. The whining has already begun.
During the past few months there have been calls to slash government spending, but it seems no one wants cuts made to programs from which they benefit. However, unless we are collectively willing to “bite the bullet,” and take some pain now, the potential pain we face because of our exploding deficit will be far greater. It’s time to put aside self-interests and to come together for more than the good of the country—for the survival of our way of life. It’s time to look beyond “what’s in it for me,” and to consider a possible future burdened with unsustainable debt.
Those in real estate related businesses need to seriously consider supporting changes to the mortgage interest deduction. Contrary to proselytizing and popular belief, making changes won’t cause the collapse of the housing market; the facts fail to support such an argument. Studies have shown that the MID has far less impact upon home sales than most believe; and other developed countries, such as Canada, have no such housing subsidy. Yet some of those same countries have similar or even higher rates of home ownership than the U.S.
Both NAR and NAHB, which combined spend almost a hundred million dollars a year lobbying congress for legislative favors, are ramping up opposition to modifying the mortgage interest deduction. Perhaps their monies would be better spent on programs that would promote home ownership or in developing new technologies that could lower construction and operating costs for homes, and thus entice additional buyers. The housing industry should be self-sustaining, and should not require government subsidies.
Finally, for those who interpret my argument as supportive of the efforts of either political party, I find the proposals of both sides to fall far short of the cuts necessary to rescue our country from its slide towards the abyss. And though we have yet to address the measures required to put our economy on sound footing, opposition grows stronger to any suggestions which might impact entrenched special interests.
The majority of our “leaders,” myopic myrmidons incapable of non-partisan action, are either unable or unwilling to see beyond the next election. We, however, could set the example by demonstrating our readiness to take our “bitter pill” today, with the awareness that postponing could put our economy in full cardiac arrest. Let’s stop whining about the mortgage interest deduction. Addressing the budget crisis is an issue far greater than housing or any other segment of the economy, and it is an issue that will ultimately impact all segments.
The Housing Guru: The expert source for all your housing questions—now featuring daily updates of Today’s Housing News
Comments(83)