> Barry Ritholtz wrote about this recently. He takes issue
> with the belief that the mortgage interest deduction was a
> policy designed to encourage home-ownership; he claims it
> is a hsitorical anachronism from when all interest was
> deductible when the income tax was originally introduced.
That's true from an originalist standpoint; the question is: when they got rid of the interest deduction (principly because that sector had grown, and it became clear that it was wrong), why did they leave mortgage interest? That's when the policy decision was made.
He's right that it wasn't *designed* to do that; but he's missing the larger point.
/jordan