Scale Back the Mortgage Interest Deduction?

As we all know, the U.S. government will run annual budget deficits for as far as the eye can see. There's been plenty of talk from both sides of the aisle about ways to raise revenue (read: more taxes) or cut spending (like Social Security). And then there's the oldie but goodie: eliminating or capping the mortgage interest deduction. This morning, noted economist Martin Feldstein, the George F. Baker professor of economics at Harvard University (whatever that is) and president emeritus of the National Bureau of Economic Research (we all, sort of, know what that is), said the mortgage interest deduction should be reduced but not eliminated entirely. If consumers cannot deduct interest payments from their taxes that money (what we call 'revenue') will flow to the U.S. Treasury. Meanwhile, in other revenue-related news, the unemployment rate fell in most states in June. Unfortunately, most of the improvement came because more people gave up searching for work and were no longer counted in the jobless numbers. Presumably, some of the jobless have mortgages...