Over the years, as the [housing] gains continued, more and more people took it as an article of faith that American housing was a good deal. Fannie...
Over the years, as the [housing] gains continued, more and more people took it as an article of faith that American housing was a good deal. Fannie Mae (FNMA) and Freddie Mac believed it, and sold the idea that home purchases were essential to the American dream. By 2006, after 10 straight years of increases in the S&P/Case-Shiller index, the idea that houses had been overpriced in 1996 looked idiotic. Today, the argument that house prices can go too high, or that something was wrong about them, doesn’t sound so silly. Now Americans see houses for what they really are: boxes that depreciate. This is therefore the least expensive time to abolish the deduction. We have already taken the hit — and 2012 is also the time when we most need the $100 billion or so from the elimination.
The full text posted on Bloomberg.com here.
This post was written by Amity Shlaes, Director of the 4% Growth Project at the George W. Bush Institute. Find her on Twitter @AmityShlaes.
