No more mortgage-interest deduction

Do you want to know what's wrong with American politics?

The problem is you can't propose measures that are actually good for people and the country because of the nature of our "entitlement society." People think they're getting something from the government when they really aren't. In fact, usually, they're getting shafted.

But, in the context of a political campaign, with an ignorant and retrogressive media that favors bigger and more intrusive government, it's nearly impossible to reason with people.

This year is no exception.

Let me give you an example.

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One recent anti-Mitt Romney TV ad I saw claimed he was in favor of eliminating the mortgage-interest deduction.

Now, I very much doubt it's true that Romney supports such a plan. I haven't researched it myself, but I generally assume that everything that comes out of the mouth of Barack Obama supporters is a lie – and then go from there.

But here's my point: It makes perfect economic sense to get rid of the mortgage-interest deduction. It seems like a benefit to homeowners carrying mortgages, but it actually is one of many factors driving up the cost of housing, the scarcity of mortgage loans and interest rates.

Of course, an even better idea would be scrapping the entire tax code, the income tax and the Internal Revenue Service. These are retrogressive institutions that long ago outlived any usefulness they may have arguably had at some point in American history.

But let's get back to the question at hand – the mortgage-interest deduction:

Why would government provide a deduction for mortgage interest as opposed to food or gasoline or your entire mortgage payment? Have you ever thought about that? What is the justification – the rationale?

Originally the idea was to help people getting into home ownership by giving them a little break on the expense. But, as usual with government, it didn't figure in the unintended consequences – or maybe it did and just didn't care.

• Unintended consequence No. 1: People took out second loans and incorporated all their credit card debt into them so they could get a break on interest on more than their original mortgage. This resulted in more personal indebtedness – one of the most crushing burdens Americans face (beside, of course, the burden of national debt placed on them by government).
• Unintended consequence No. 2: People care less about finding the lowest interest rates available because they could always deduct it from their taxes.
• Unintended consequence No. 3: People got into houses they couldn't really afford because of the incentive the government provided.
• Unintended consequence No. 4: More paperwork, more accountants, more bureaucracy.

There were also some bad consequences that were almost certainly intended:

• Politicians were empowered as they tend to be when they provide "entitlements" like this to citizens, which is one of the inherent problems with the income tax code, which allows the government to bestow favors on some and punishments on others.
• Once a program like this is set in place, it's almost impossible to eliminate because of the political and media propaganda involved with taking away one of the perks or goodies government has bestowed almost as a natural right.

Now I'm not here to tell you that the mortgage-interest deduction is one of the most pressing evils we face in our lives today.

I'm simply making the case that it is not a good idea – one of those bad ideas that are so difficult to extricate ourselves from in the current political environment.

It puts government in the driver's seat. And that's almost always a bad thing. The government should have no interest or concern or business even knowing what your mortgage is, how much money you make or how much interest you pay. That's what a free society would be like.

These are the kind of silly issues that serve as bread and butter for Democrats. They salivate over the chance to pretend they are giving you something when they are actually taking away your freedom and your property.