what if we largely replaced the [mortgage interest] deduction with incentives to buy a house, rather than to run up a lot of mortgage debt?
No matter how much sense his economic arguments might make, he does not understand the point of housing policy. Lobbyists spend money to capture politicians. Politicians set housing policy to please lobbyists.
Is it even a “housing policy”?
What percentage of home equity loans were used to increase the value of homes?
It’s really just a banking/credit policy where we destroy capital formation in exchange for more votes.
Of course you are correct. But i really can’t even think about this any longer. It will simply never ever ever change. Feels like time spent on it (and other rational economic policies) is time wasted to be honest.
This is why I’m working on a high-frequency trading algorithm that every time someone says “then work within the system to change the law” or “if you don’t have anything to hide, then why would you be worried” or “they aren’t interested in spying on little old you” (yes, I realize that if I had any power they’d already be spying on me) my computer automatically orders another box of ammo.
It is more of an income tax deferral and avoidance mechanism. It is difficult to change as it changes assets values and wealth. The highest earners achieve this through retirement accounts but those are limited to modest levels for ordinary earners. One would probably have more success capping retirement accounts at a fixed level since that would only affect a few albeit very powerful.
Aside from the lobbyist point, I don’t think incentives to buy houses are any good either. In Australia successive state and federal governments have done this with a “first home owner grant”. All this did was push the prices of these houses up by that amount, perhaps a little more. A transfer of tax payers money to existing home owners via the first bower. Silly stuff.
I hated renting, but maybe that means govt should subsidize sound deadening rather than lawns.