Deficit Reduction: The Home Mortgage Interest Deduction And More

OS has watched in amusement as both the Hard Left and Hard Right beat their breasts in anguish (sincere anguish, I tell you)over the modest proposals of the panel tasked to examine alternatives for spending reductions and revenue enhancements.

Great breast-beating has occurred over the idea that the home mortgage interest deduction should be eliminated. One would think that the world is about to end, and-let's-all-get-ready-for-Jesus-to-show-back-up, over this idea.

It's really not a bad idea. It takes some of the moral hazard for home purchase off the tax system. It will drive down the purchase price of houses, and help keep mortgage rates low for a long time. It will remove one governmental distortion in the real-estate market, which cannot be a bad thing. It will encourage homeowners to pay mortgages off early, since there is no 'tax reason' for letting that weight hang around the neck. It will curb the practice of the 30-year (or more!) mortgage, which is pernicious. Used to be, most mortgages were 7-to-10 years, max. The idea was pay that sucker off, and not use the house as a personal credit card. We used to buy houses to live in, raise our kids in, and let the estate sell after we were gone. If the estate recouped the purchase price+capital improvements of the house (adjusted for inflation), plus a modest profit, everybody grinned on the way to the bank. That approach created stable neighborhoods, and very few exploding banks. The local Savings and Loan used to fund and hold the mortgages as well. Remember, before the Banksters moved in on us all?


It will raise Mr. and Mrs. OS's yearly tax bill, but not by a statutory rise in the tax tables. The federal government must find a way to both severely reduce spending, and take in more money, both without upending a fragile economy.

But, this is a negotiation, ya'll. Ain't no free lunch for the guv'mint, to be sure.

So, the guv'mint takes away the deduction, and gets some money in the door. In return, they slash three dollars for every dollar they get in from this change in the tax code.

Here's a list of candidates:

The EPA--cut it by 75%--and not a penny toward 'climate-change' regulations. They concentrate on clean-enough water to irrigate farms, and clean-enough air for the metro areas. Period.

The Department of Education. Cut it by 85%. Tell the states they own their school systems, and to figure things out on their own, beginning with making sure that home-schoolers aren't harrassed. No more running a loan-sharking operation victimizing college students, potentially enslaving them. No more unfunded mandates, no more 'grants for this and that', no more, period. Keep an office for the Secretary, who will be a charismatic cheerleader and Congressional butt-kicker, and give him/her a staff of ten folks (about the size of a Congressional staff) to do the job.

Corporation for Public Broadcasting. It goes away, and never returns.

National Endowment for the Arts. Ditto.

That's a good beginning.

OS will gladly move official retirement age to 70 forthwith for a second round of cuts, including the repeal of ObamaCare. Our health insurance premiums just went up 15% this month, with no major change in actuarial bracket, and no dramatic health conditions noted to justify the change.

Eliminate that prescription medicine thing as well, and slash the Commerce Department in half.

Eliminate the capital gains tax, by Constitutional Amendment.

Pass and enforce the Balanced Budget Amendment to the US Constitution. Most states have that in their constitutions, they have every right to expect in the Federal Constitution. We will see de facto secessions in the next decade unless this is addressed.

See how this works? Everybody's gonna have to give stuff up, 'cuz we can't survive as a culture on our present course.

Take away Medicare from 2025 onward, with the proviso that all Obamas, Pelosi, Reid, all Clintons, all Bushes, Dick Durban, Barney Fwank, John McCain, Olympia Snowe, and Sarah Palin all retire from public life immediately, and promise to never run for anything again, or endorse or raise money for anyone else running for anything, from President to local county alderman. Vote them all generous pensions, with the proviso that they all move to places like Tasmania or the Canary Islands. They can work on their suntans, but they have to leave us alone.

WeimarBen and LittleTimmyGeithner resign forever from the Fed and Treasury, and depart the money business permanently. The Fed, if allowed to live, is broken up and its wings are clipped.

Now THAT would go a long way toward solving our problems. We'd have gold at $200 the ounce, and DOW at 18K in short order.

Let OS freely make money, and he'll happily pay taxes to the greatest nation in history.

Raise the taxes, but solve the problems.

Give and take.