Get the Housing Industry Out of the U.S. Tax Code

Like a lot of people, I have a mortgage. Unlike a lot of people, I am in a big hurry to pay it off. Most people want to pay interest to the bank, which they can then deduct from their income for tax purposes. I have never understood why you would want to pay money to someone so you can get some of it back.

In effect, mortgage interest is subsidized, meaning you end up paying a lower effective interest rate. A 3.75 percent mortgage becomes approximately a 2.8 percent mortgage, and there are a lot more houses you can afford with a 2.8 percent mortgage. That's the point. The tax code is designed to incentivize people to buy houses. Not just any houses, but bigger, more extravagant houses -- built by homebuilders. We have unintentionally designed a tax code whose intent is to drive people into debt to buy houses, making the economy more fragile. We should instead think about ways to make it more anti-fragile.