Mortgage Interest Deduction and Government Spending

The federal government is bleeding red. Is this news to anyone? Per the National Debt Clock, every man, woman and child in the U.S. currently owes just under $45,000 -- that means that a typical family of four such as mine owes $180,000 just because we're American citizens.



I believe and not just as a Realtor, that housing plays a crucial role in our economy - from employing construction workers to industries that supply the housing market (interior furnishings, building materials, ...), housing feeds into our ecomony in many large ways.



We need to look at all of our government spending to determine how we can not only balance our out-of-control budget but also start paying down some of our debt. More taxes aren't the answer so I am not outright in favor of eliminating the mortgage interest deduction (MID) which would add another $3000 onto the tax bill of a typical family with a $220,000 mortgage at 5% interest rate and a 25% tax bracket. We all need to realize however that NOTHING IS OFF-LIMITS -- no protectionism of our individual pet interests or prevention of self-sacrifice! To get us and U.S. through this crisis and yes, it IS A CRISIS, there will be plenty of sacrifice to go around.


Many other countries (notably Canada and the U.K.) have eliminated the mortgage interest deduction and lived to tell about it. It won't ruin the real estate or housing industry so it is something that should be considered but again, it would be something of a new tax. REDUCING SPENDING is key, not new taxes. Raising more money for government isn't the answer as this will just lead to bigger government and more spending. We should look at all areas of government spending for areas to cut so we can LIVE WITHIN OUR MEANS. There are ALWAYS reasons to spend more -- financial crisis and war just to name two. This doesn't work with my family budget and it shouldn't work with our elected and WELL-PAID elected officials.

Congresses deficit panel is recommending a limit on the MID, limiting it to 1st homes and up to $500,000 rather than doing away with it altogether.

It's time for our elected officials to make the hard (and sometimes unpopular) decisions we elected them to make. There will be short-term pain, discomfort and disagreement but our long-term survival as a nation depends on it.

Visit the U.S. National Debt Clock