Would this really be a bad thing if we got rid of it? As we can see, the current structure of the US economy was a house of cards (no pun intended). The US economy has been too reliant on consumption to provide growth. There is a danger to this type of economy and now we see why.
What we see happening right now is the economy trying to restructure itself to be more balanced which is a good thing. Of course, there is pain in any type of restructuring. The government wants to maintain the status quo (they do not want unrest in the citizenry) by stimulating consumption, which is a foolish endeavor obviously and it hasn't worked as one can see by Obama's failed policies. It's like trying to stop a bowling ball from rolling down a hill with a bb gun.
I suggest that we go ahead and scrap the MID. This would affect the economy in a few ways that I can think of.
1) It would actually provide affordability to the housing market. Housing prices would drop more and be in line with historical averages and be more affordable at current wages for the middle class. All the MID does is drive prices higher. It's ironic that the government wanted to make housing more affordable for everyone yet the MID does the complete opposite. That is government at work, people.
2) The loss in MID should be balanced with income tax rate reductions. Such a move should be neutral such that no one pays more in taxes. Again, the same battle between production and consumption. We need to reward production (income) more so than consumption (MID). Production is the true engine of economic growth.
So when Romney talks about getting rid of the MID, you really need to think about it more than just at face value. Democrats should support such a move since more people will be able to afford housing. Those that currently own homes will see a drop in their value as a result. In the long run, rebalancing the economy will very important.
I agree. The MID makes the prospect of taking on a huge amount of debt look too attractive to a number of people, and it artificially increases the demand on housing.
Getting rid of the MID would also allow the Federal Reserve to let interest rates gravitate toward their natural level, as opposed to keeping rates artificially low. Seems like a win-win.
Ok, hope that felt good.
But it doesn't take away the fact that your "solution" sounds just like a left-wing solution.
Left/Right, left/right, left/right.
It is all the same. The only difference are the talking points, which mean nothing and never address the issue.
You could make the same arguments against student loan interst deductions, child care credits, etc.
Really, the best solution is just a complete rehaul of the tax system in this country to a much more simple and efficient system.