Time to End the Mortgage Interest Deduction

I’m a big fan of the two shows This American Life did with Pro Publica regarding the Giant Pit of Money. Shoving interest rates down for so long meant that bond yields were nada. A historically unprecedented amount of money went looking for higher returns. Match that with poorly doc’d CDOs and you’ve got a setup for the biggest balloon since the tulips.

I was out purchasing in 2005 and deeply frustrated by competing in that market. I feel sorry for many, but I also got screwed in a different way. All that easy money meant that I had to pay a lot more for a house than in a reasonable market. We put down a bit over 10% and have a 15 year fixed mortgage. Even given a decline in values (we’re probably down about 10% in Alexandria, VA), we have solid equity in our home.

Personally, I’m in favor of terminating the mortgage interest deduction. I doubt that it’s done much for its purported aim, increasing home ownership. If you look at ownership rates internationally (I’m not on the SCOTUS, so I’m allowed to do this), you’ll some interesting results.

Australia – 69%
UK – 69%
US – 68%
Canada – 67%
NZ – 65%

Take a look at my not so random selection. Home ownership rates are comparable in the UK and English speaking former colonies. The desire for home ownership is a cultural matter, independent of a mortgage interest deduction.

But wait! One argues that it makes home ownership more affordable. No it doesn’t. Historically, the calculation has been based on income. If the government subsidizes mortgage payments, then housing prices will simply rise to compensate.

As an interim measure, I would suggest a housing tax credit of up to 20% with a limit of the median price of a home multiplied by the average interest rate . No second homes either. Sunset it by 1% per year until the damn thing disappears around 2030.

BB

60 Responses

  1. Why not? One consequence may be to drive home prices down, which will trap more homeowners with negative equities. Another might be to make renting more attractive in the short run [landlords will be able to take the ordinary business deduction for the mortgages they pay, thus making rental units potentially cheaper options than purchases in the same markets]. None of the potential problems are such that a new equilibrium would not be established in time. ******************** Would you also do away with the charitable deduction? Why? Why not?

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  2. Mark:Would you also do away with the charitable deduction? Why? Why not?Why should there be any deductions?

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  3. With regards to the mortgage deduction, I judge that it is an utter failure in terms of its purported goal. The goal wasn't to increase home prices, but rather to increase home ownership. I should note to all that I lived in the UK and was a home owner there. I bought my semi-detached (duplex in US terms) in Sheffield in spring 1997 for 60,000 pounds and sold it for 83,000 pounds several years later. I wish I would have held onto it further as there was a similar bubble in house prices as there was here. [Note to anyone blaming Freddie, Fannie and the CRI–the UK had the same bubble and none of these factors.] Now, unwinding this failure will not be easy. It'll be difficult for the reasons Mark outlined. Yet, it must be unwound. The shift that I propose would mean a significant hit to higher priced homes. This includes my own. Put in some kind of a one term shift and we're OK.I'll put the question in an alternate way. Given that the mortgage interest deduction has not resulted in higher rates of home ownership, please defend its continued existence.BB

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  4. I don't know that one can state that since ownership rates are similar in other countries without the deduction, that necessarily means that it has not worked here. It could be that without it, our rate would be substantially less than others. If the number one rule in property is location, location, location, perhaps the US is simply a better location with higher prices and fewer people being able to afford it?OT – RIP Vaclav Havel, the leader if the Chech Velvet revolution. What significant leaders are left from that period? Lech, Bush…anyone else?

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  5. I basically agree with BB and like Scott I would do away with all itemized deductions. I think the best argument for the flat tax is SIMPLICITY and I want to flatten taxes.However, unlike the economic libertarians here, I think that Adam Smith was right when he said the poor should be exempted from taxation.So I would aim for a much more generous standard deduction and a flat rate [or perhaps two brackets] above that universal standard deduction. If there were more than one bracket, or if CG treatment were abolished, I would bring back averaging.There are no perfect systems as far as I am concerned, and whether we flatten income taxes or not I would prefer to move away from income taxation, as a whole.But in the context of what we have, I agree with Paul and I agree with Scott on eliminating itemized deductions – although I make no "fairness" claims.

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  6. Given that the mortgage interest deduction has not resulted in higher rates of home ownership, please defend its continued existence.It helps lower the tax bill for people who already pay far too much in income taxes.

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  7. Kim Jong Il is dead.

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  8. Dave! – James Baker, who you know was one of my fave SecsState, is alive and well at the Baker Institute at Rice U. in Houston.Robert Gates was active then, and until very recently. Gen. Powell is still with us.And Gorby is still writing op-eds in Moscow calling for greater freedom in Russia.I heard Havel give a great speech to Congress in the nineties.On C-Span, of course.

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  9. TMW – I outlived lil' kim!

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  10. Scott makes a good point in favor of eliminating the deduction. It's regressive. Hence, my proposal of a flat rate credit as an alternative.[9 comments, 10 now on a Sunday night. Woo hoo!]BB

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  11. FB:Scott makes a good point in favor of eliminating the deduction.Um…my point was in favor of retaining it.9 comments, 10 now on a Sunday night. Woo hoo!There's still a question to you on the Thursday night thread that remains unanswered.

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  12. Yeah, well. Thursday is bowling night, we went to a friend's Novena on Friday, and had friends over on Saturday night to celebrate my SPIE fellowship. I guess it'll have to remain unanswered.BB

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  13. FB:Thursday is bowling night, we went to a friend's Novena on Friday, and had friends over on Saturday night to celebrate my SPIE fellowship. I guess it'll have to remain unanswered.It was a question about something you posted on that thread less than 2 hours ago, so I'm not quite sure what relevance your social schedule from Thursday to Saturday has.

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  14. I'd get rid of income taxes altogether. If the assumption is to keep them, I'm onboard with killing mortgage interest deduction & am open to Scott's & mark's arguments.

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  15. Oh. Retaining? Nevermind.

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  16. Check that…less than 3 hours ago, not 2.

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  17. bsimon:I am in favor of eliminating all deductions and having a flat rate. I am not in favor of eliminating just the interest deduction but keeping all other deductions and current rates in place. Such a proposal is simply a thinly veiled attempt to soak-the-rich even more than they are already soaked.

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  18. "The adults in the room are perfectly aware that actions by the Fed had the dual effect of causing a strong recession and wringing inflation out of the economy."Volcker…Fed…20% interest rates…stagnation…but finally killed the inflation. That is how I recall it. I was 38 at the time. I was an adult.Some of you were less than 18 at the time.:-)Good night, y'all.

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  19. BTW, bsimon…I am all for eliminating the income tax altogether, too.

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  20. Scott – My response was a bit flippant, but your comment suggested I should be looking back at a thread from Thursday. I try to check out threads on which I've commented, but I do have priorities. And why not simply repeat the question (hopefully with a bit of context)? Do you want an answer or prove a point?As for your comment being in favor of retaining it, it illustrates why I'm in favor of killing it. Same evidence, different conclusions.BB

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  21. FB:My response was a bit flippant, but your comment suggested I should be looking back at a thread from Thursday.It was a thread from Thrusday…the one you posted on a few hours ago.And why not simply repeat the question…OK. You said:The adults in the room are perfectly aware that actions by the Fed had the dual effect of causing a strong recession and wringing inflation out of the economy.This room? Who here do you not consider an adult?As for your comment being in favor of retaining it, it illustrates why I'm in favor of killing it. Yes. You want the people who already pay the most taxes to pay even more.

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  22. BTW, FB…are you aware of the "comments" tab in the Posting dashboard? It allows you to see all comments in one long thread without having to keep opening and updating all of the various posts on which you may have posted comments in order to see anything new. Very useful.

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  23. Agree on eliminating all deductions.I wish Christopher Hitchens could have lived to hear about the death of Kim Jong Il. Hitchens was always the scourge of totalitarianism.

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  24. BTW, you do have to be an admin to see the comments tab in the posting dashboard, I believe.But I believe FB is an admin. I'd know, but that'd involve checking, and I'm a gotta get to work. While I'm personally glad to have the mortgage interest deduction (and I take it), I think it's non-functional policy and should be gotten rid of, along with many other non-functional loopholes. You'll never get rid of the charitable deduction, however, so don't even bother.

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  25. Kim Jong Il is dead.Hopefully this is good news for Korea. Sometimes it is, but often it isn't, when there's a succession of power in a dictatorship.

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  26. BTW, "the adults in the room".I'm feel fairly certain that we are all above the legal drinking age, here.

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  27. Kevin:I'm feel fairly certain that we are all above the legal drinking age, here.And I feel fairly certain that FB was retreating into PL-style insults.

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  28. Is there a way to post a .pdf on my computer?I have a 2006 paper that claims that the USA expanded its industrial output from 1980 to 2005 and that in 2005 this was still the leading manufacturing country in the world.I want to know if it is fallacious and manipulative, or essentially true, and some of you may have the expertise to analyze the assertions.

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  29. And I feel fairly certain that FB was retreating into PL-style insults.It may have been an insult, but I browsed PL last Friday. It's definitely not PL style. Far too subtle. Not sure about posting a PDF directly. I'll see. Otherwise, you can upload it to any webserver and post a link, or email it to me and I'll upload it to my webserver and post a link.

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  30. You guys make me nervous when you discuss taxes. I do NOT trust our legislators to get this right. Regarding the mortgage deduction, I remember when mortgage rates were over 9%, we had one, and a friend had one at 13% in the 80's. None of us would have been able to afford a home at those rates without the mortgage deduction. I'm in favor of removing deductions and lowering the overall rate but not an across the board flat tax.Again, I doubt our legislators with their big donor bases will ever get it right.

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  31. The mortgage interest is the single largest tax deduction the middle class has. Eliminating it without a compensating decrease in bracket rates would be a huge net tax increase. It is also most valuable to people in areas of high property values which tend to skew more liberal so there is a hidden political agenda among those who want to eliminate it.

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  32. yello:…so there is a hidden political agenda among those who want to eliminate it. If FB is adovacting the elimination of the deduction because of a "hidden political agenda" to screw over liberals, I have to admit he has doing an outstanding job of hiding it.

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  33. yjkt, the highest interest is paid on the biggest loans in any area. I doubt your blue/red generalization is more accurate than one that stated that conservative rich people would be the big losers. Without serious data crunching, the proponents from FB to Scott are unlikely to be of one political persuasion. There are either no hidden agendas or multiple ones, but the essential nature of the criticism of the deduction remains.LMS, for people trapped as you were in the 80s with high interest loans, FB proposed the 20 year gradual decline of the deduction [or credit, in his proposal].KW, thanks for the tip. I will load it as a google doc later and then cite to it.

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  34. Eliminating it without a compensating decrease in bracket rates would be a huge net tax increase. I'm entirely for a more-than-compensating reduction in tax rates on the middle class, BTW. It is also most valuable to people in areas of high property values which tend to skew more liberal so there is a hidden political agenda among those who want to eliminate it.I have no idea if this is factual or not, and I'm not sure how you would substantiate it. I've seen little indication of it. I benefit from the mortgage interest deduction, and it's probably more important to my lifestyle that it is to a wealthy liberal with a million dollar mortgage. BTW: Why should there be any deductions?To provide incentives for certain desirable behaviors (say, insulating your home, or spending money locally, or buying an electric car, or voting for a particular politician) , to prevent the double or triple taxation of income (I should be able to deduct state income tax from my federal income tax bill, shouldn't I?) and if I'm a private contractor why shouldn't I be able to deduct my expenses, which may be highly variable, from my taxable income? BTW, to lmsinca's point about legislators not getting it right: any talk of "getting the money out of politics" is entirely pointless and completely unserious, so long as our elected representatives write the tax code. That where the real money in politics is.Yet, would you want unelected bureaucrats writing the tax code? I believe we face a conundrum, there.

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  35. KW, the 1939 Code was written by 6 people, it is said. That was the only shot we ever had at simplicity. Nothing is as lobby written, month-to-month, as revisions of the IRC. Any reform we do to it will be undone in ten years of attrition, so it should be posted for overhaul and slimming every ten years, IMO.NoVAH, will you tell us the good and bad of the decision to leave the definition of essential minimum services under ACA to each state? Sounded like a punt to me.

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  36. Mark: Would you also do away with the charitable deduction? Why? Why not?Meant to comment on that previously (although I kind of did). I would get rid of the charitable deduction, personally, based on the same theory that expenses not related to the acquisition of income need not be deductible. Although one could argue that certain charitable contributions are a part of doing business, so even that could become muddy.But I would leave it untouched in any serious proposal to remove deductions, as there is generally a bipartisan affection, especially in the political class, towards the charitable deduction. The belief is that it would profoundly impact charitable giving, if it were not available. I do not believe this to be true, but I recognize that I'm going to forever be on the losing side of that argument. If interested in accomplishing something, as regards the elimination of loopholes and deductions, I'd pick battles I thought we had some hope of winning.

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  37. Kevin:I'm entirely for a more-than-compensating reduction in tax rates on the middle class, BTW.I am for a less discriminatory reduction in tax rates on everyone.To provide incentives for certain desirable behaviors…I think the purpose of taxation ought to be to limited to funding the government and ought not be used to manipulate behavior. When the purpose of taxation becomes social engineering, it becomes an even greater threat to freedom than is already the case.

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  38. bsimon said… I'd get rid of income taxes altogether.B, are you a consumption tax guy?KW – "To provide incentives for certain desirable behaviors"Desired behaviors…desired by whom? Not me…Mark – "poor should be exempted from taxation". Balderdash! The poor need to know that that taxes are paid, even if it is an exercise in paperwork (and in the end very little of their money goes to gov).

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  39. I could be wrong, but I think Kevin's comment about incentivizing certain desireable behaviors was an observation of how our current system works as opposed to arguing for such a system. As a first time home owner I am completely against getting rid of the deduction. It's unfair that you all here have been able to enjoy it for years and now want to rob me of it. That's sarcasm for those of you playing at home, but I don't doubt that people feel that way.

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  40. ashot: could be wrong, but I think Kevin's comment about incentivizing certain desireable behaviors was an observation of how our current system works as opposed to arguing for such a system.Maybe. But my question was why "should" there be any deductions, not how does the current system work, so I interpreted his answer as a defense of deduction, ie "this is why there should be deductions".

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  41. "As a first time home owner I am completely against getting rid of the deduction. It's unfair that you all here have been able to enjoy it for years and now want to rob me of it. That's sarcasm for those of you playing at home, but I don't doubt that people feel that way."A good point. Entirely apart from any view I have, or don't have, about the deduction, it's a good point. And I'm curious, is there a good short term argument to be made for removing the deduction? What argument could be made to persuade people who bought, relatively recently, in order to take advantage of the deduction or, for that matter, people who've factored the deduction into their long term financial planning?

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  42. Dave! Desired behaviors…desired by whom? Not me…Are you a politician looking to cater to middle-class voters?Scott: I am for a less discriminatory reduction in tax rates on everyone.I'm for more discriminatory taxes, but then, you probably already knew that. I want lower taxes (progressively lower) on everybody under the $250k range, higher on everybody above it. Tax injustice for a more robust economy for everybody!I think the purpose of taxation ought to be to limited to funding the government and ought not be used to manipulate behavior. When the purpose of taxation becomes social engineering, it becomes an even greater threat to freedom than is already the case.I'm not entirely against putting social engineering in the tax code (or in the handing out of entitlements), but certainly understand the objection. The point of taxes should be to fund government, not incentivize certain behaviors. While, again, not philosophically opposed to the idea of incentives in the tax code, most incentives tend to be designed around catering to a certain bloc of voters to the benefit of certain groups of politicians. Thus, whatever generally positive things that might be induced via incentives in the tax code are likely blunted by negative incentives designed to help politicians, rather than positively impact the domestic economy.

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  43. What argument could be made to persuade people who bought, relatively recently, in order to take advantage of the deduction or, for that matter, people who've factored the deduction into their long term financial planning?Tax reductions in excess of the average interest deductions for households making less than $250k on loans of $500k or less. Something like that might be approach. A 15 year phase out of the deduction and an immediate elimination of the deduction for secondary properties.

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  44. kevin:I'm for more discriminatory taxes, but then, you probably already knew that.Yup. Seems rather contrary to the principles that presumably ground your advocacy for law outside the context of taxation. Which is whacky to me.

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  45. I'm just applying a little non-quantitative logic. Property values are highest in the Northeast and Pacific Coast, areas which are traditionally liberal. True, the people with the highest property values and/or mortgages would tend to be 'wealth creators' near or in the much vilified 1% who would tend to be more conservative politically.When people start kicking around eliminating the mortgage interest, they also usually throw in as well eliminating property and state income tax deductions. All of these also correlate strongly with blue states. It's just a pattern, not a hard and fast rule.Eliminating deductions is not that big of a deal for high income people up in the Alternative Minimum Tax range where these deductions phase out anyways.So the people most likely to get hit with the elimination of mortgage interest are those with income/mortgage ranges where the value of the deduction exceeds the standard deduction but less than the ATM values. Essentially a working definition of the home-owning middle class.Of course it would have to be phased over years since large swathes of our economy are based on the real or perceived value of the mortgage interest deduction.And anytime you start talking taxes it spills over into progressivity, the treatment of capital gains, and all the other hot buttons.As a big picture item, I see it as a moot point since like I mentioned earlier the only palatable way to implement it is with some other form of middle class tax relief. I do see the potential for eliminating deductions for second homes, jumbo mortgages, etc. as a camel nose and/or a class warfare wedge issue. But then it becomes politics instead of tax policy, if such a distinction can be made.

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  46. yello:Slight deviation from the topic, but…True, the people with the highest property values and/or mortgages would tend to be 'wealth creators' near or in the much vilified 1% who would tend to be more conservative politically.Is there any evidence that this is true?

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  47. Also, yello introduces another interesting topic…why in the world should people who choose to live in states with high income/property taxes get relief from their federal tax burden relative to those who choose to live in states with lower income taxes?

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  48. " B, are you a consumption tax guy?"Yes. Some combination of carbon, financial transactions, perhaps VAT or others. The idea that social engineering through the tax code is wrong is theoretically reasonable. Problem is it can't be avoided. People will modify their behavior as the environment (speaking fiscally here) changes. As some have argued for years, why tax something (income) we want to encourage?

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  49. " ? What argument could be made to persuade people who bought, relatively recently, in order to take advantage of the deduction or, for that matter, people who've factored the deduction into their long term financial planning?"If we're stuck with the income tax but can eliminate some deductions, I'd go for a gradual, but accelerated phaseout.

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  50. Scott: Is there any evidence that this is true?Twice as many people self-identify as conservative than liberal, so while I'm not sure there is any evidence that the idea is true, in the absence of actual evidence, it's a reasonably good bet. Just based on how many more people self-idenitfy as conservative, rather than liberal.

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  51. ScottC: Also, yello introduces another interesting topic…why in the world should people who choose to live in states with high income/property taxes get relief from their federal tax burden relative to those who choose to live in states with lower income taxes?I can't really see a good reason, other than a general impetus to avoid double-taxation of income (which I applaud). However, DC is very tiny and the rest of the states are very big. Like the lion tamer or the elephant trainer, you should always be mindful with whatever your leading is much, much bigger and more powerful than you in reality. I think a large number of states (especially the high tax ones, but even ones that are not) would rise up in opposition. Nobody in Washington is going to want to stir that hornets nest. Although it seems to me that high-tax blue states that complain about how much more they pay to the federal government than they extract are also receiving a de facto subsidy from the federal government that isn't counted in those number by what they don't collect in revenue, because the state effectively intercepts it.

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  52. Kevin:Twice as many people self-identify as conservative than liberal, so while I'm not sure there is any evidence that the idea is true, in the absence of actual evidence, it's a reasonably good bet.By this logic (which seems reasonable as far as it goes)then yello's claim/point is not particularly interesting. Afterall, on the same logic, it would be an equally good bet that most of the 99% – ie the people who would ostensibly suffer according to yello – would also be conservative.

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  53. Of course, the people who would suffer most would be at least 2:1 majority conservative, self-identified. Or close, just on statistics. But the reality is that most of these arguments are made on policy preferences and philosophical principles, not on who we wascally partisans think will be hurt the most.That's saved for gerrymandering, where it actually counts.

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  54. Hoo-boy.The phrase "adults in the room" was meant more to the general discourse rather than directed at anyone here. I suppose I could have gone with "it should be blindingly obvious" that the 1982 recession was a consequence of a severe monetary restriction in order to wring inflation out of the economy. "Deliberately obtuse" is a cinematic phrase that also rings true here (from the Shawshank Redemption). As in one has to be deliberately obtuse to not correlate Fed policy with the '82 recession. Having come into my political awareness at the time (the 1984 election was the first in which I voted), the 1982 recession was a defining event.Here's a finer way to put it (from UC Berkeley): "Between 1980 and 1982 the U.S. economy experienced a deep recession, the primary cause of which was the disinflationary monetary policy adopted by the Federal Reserve. The recession coincided with U.S. President Ronald Reagan’s steep cuts in domestic spending and led to minor political fallout for the Republican Party. A gradual loosening of monetary policy as well as the stimulative effects of tax cuts and defense spending increases promoted a sustained yet uneven recovery."I won't be apologizing. If I mean to insult you, Scott, be well assured that I will be direct. And then directly out of here as it is inappropriate in this forum.I should also note that I did not call for a general tax increase. I believe the phrase broaden the base has been used of late. As a matter of social policy, the mortgage interest deduction has been a complete waste of effort. Funny. I thought conservatives would oppose using the tax code for social engineering. Odd that my proposal to eliminate social engineering from the tax code drew its harshest opposition from a conservative.BB

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  55. FB:If I mean to insult you, Scott, be well assured that I will be direct.Since I wasn't involved in the discussion, I didn't think you were insulting me. I thought you were insulting qb. Still do, in fact.Funny. I thought conservatives would oppose using the tax code for social engineering.Um, I did.Odd that my proposal to eliminate social engineering from the tax code drew its harshest opposition from a conservative.It would be odd, I suppose, if you were in fact proposing to eliminate social engineering from the tax code. But actually you were proposing to eliminate a single instance of social engineering for failing in its purpose. Characterizing that as a "proposal to eliminate social engineering from the tax code" is, well, pretty odd in itself.

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  56. I graduated from high school in 1979 and turned 18 that year. Soaring interest rates, inflation, and unemployment hit me personally and hard. That was rather a defining time for me as an adult as well.I suppose I could have gone with "it should be blindingly obvious" that the 1982 recession was a consequence of a severe monetary restriction in order to wring inflation out of the economy.You could have gone with that, FB, but the claim you made was that the steep recession of 1982 (which actually started in mid-1981) was preceded by the Reagan tax cuts. And that quite simply wasn't accurate.I didn't quite follow your logic in noting my correction about the timing of the tax cuts and the recession, followed by this "blindingly obvious" comment about how the recession was caused by monetary contraction. But I gather that it wasn't really meant to be followed logically.As in one has to be deliberately obtuse to not correlate Fed policy with the '82 recession. Since the claim you made and to which I responded was a correlation of tax cuts and recession, who exactly are you saying was deliberately obtuse about a point that was never raised?

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  57. From the Thursday thread:Massive tax cuts failed to do a damn thing about the steep recession in 1981. Ditto in 2001. I suppose you could argue about causation, but the economy recovered and grew, with job growth, after the 2001 recession and tax cuts, despite the devestating impact of 911.Similarly, I can't fathom how anyone could pretend we didn't have rapid growth after the Reagan tax cuts. Lastly, the quotation above from Berkley claims that recession coincided with steep spending cuts. I haven't gone and looked up the figures, but I highly doubt that a claim of steep spending cuts can be supported. The rate of spending growth might have been restrained, but I don't believe we've ever actually cut overall spending in recent decades.

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  58. qb! Glad to see you back. I suppose you could argue about causation, but the economy recovered and grew, with job growth, after the 2001 recession and tax cuts, despite the devestating impact of 911.Indeed it did. Similarly, I can't fathom how anyone could pretend we didn't have rapid growth after the Reagan tax cuts. Indeed we did. But in both cases, there were lots of other things going on. The economy may have well improved without tax cuts. Indeed, one could argue that Reagan agreeing to an increase in the capital gains tax was, in fact, a drag on the economy–but innovation in microcomputers and new computer game and software industries, and increase in demand for technology across the board in the enterprise still led to strong economic growth. but I highly doubt that a claim of steep spending cuts can be supportedWhen have we significantly cut spending, outside of maybe closing military bases in the 90s?

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  59. Scott, you're deliberately mischaracterizing what I said. I did not say that I proposed to eliminate ALL social engineering from the tax code. When a Republican proposes to eliminate waste in government, do you castigate him or her for not removing all waste in that specific bill? As for QB, he has an acerbic manner. For example, from an older thread "I have no interest in joining in the ritual of public confession and absolution. It's all just a bit self-congratulatory and narcissistic." Hmm. That does strike me as a tad insulting. You didn't call him out on that particular thread. I wasn't bothered by it, but perhaps you would care to elaborate as to why I'm out of line and he isn't? Or perhaps you can just let some things slide (as I did in that particular case).As for the tax cuts in 1981, they were virtually coincident with the onset of the recession. As such matters are reported quarterly whereas the specific date of a bill is known. The second quarter of 1981 saw economic growth at a 4.9% rate. Of course, then the tax cuts hit and everything went south. Fortunately, Reagan saw reason and later signed several bills in the 1980s with tax increases that led to the spectacular growth up until the 1991 recession. Which, of course, was totally the fault of the deficit reduction deal Bush made. Then of course, Clinton really screwed everything up leading to the devastating recession lasting from 1993 until 2001. Fortunately, certainty was restored by the Bush tax cuts that were PERMANENT. Oh wait…[Hopefully, sarcasm is still allowed around here.]I will state for the record that I think that the reform of high tax rates in the early 1980s was a good thing. In my personal opinion, aggregate taxes should be limited to no more than 1/3 of personal income. 2 for me, 1 for you.BB

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  60. FB:Scott, you're deliberately mischaracterizing what I said.Well now, that's an interesting accusation. I think you were mischaracterizing what you said. At no point leading up to your last did you object to, or even refer to, "social engineering in the tax code". And it is pretty clear that you don't object to it in principle, since your justification for objecting to this particular instance was that it was failing to accomplish its social engineering goals. So to present your objection as a "proposal to eliminate social engineering in the tax code" (an exact quotation, not a mischaracterization) strikes me as entirely disingenuous. You also, with your "odd" comment, implied that there was some kind of contradiction or tension in my stated position. I think I was very clear that I object in principle to using the tax code to manipulate behavior and would gladly get rid of all instances of it, but I am not in favor of cherry-picking particular instances of it in order to increase the tax burden of a demographic whose burden is, I think, already too heavy. There is nothing that is "odd" or contradictory about this.When a Republican proposes to eliminate waste in government, do you castigate him or her for not removing all waste in that specific bill?I certainly would castigate him if he was making an argument analogous to yours, namely that we should eliminate only one particular instance of waste on the grounds that it didn't seem to be accomplishing its stated goal of being wasteful, and then later tried to present his proposal as an example of opposing waste. perhaps you would care to elaborate as to why I'm out of line and he isn't?I don't recall seeing that, and I'd want to read it in context, but on its face it doesn't strike me as being even close to as personally demeaning as yours was. However, I will grant you that, having been taken to task here myself more than once for far lesser offenses, perhaps I am being overly sensitive. qb is an adult (contra FB) and if he doesn't object to what you said to him, I suppose there is no reason I should.

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