A few thoughts …

1. If you can’t afford to pay your mortgage, doubling the deduction won’t make a difference. It also doesn’t do renters a lick of good, since property owners aren’t likely to pass that savings through.

2. Tightened lending standards are of course a necessity … but I don’t think it’s quite that simple.

3. The people in the lowest income tax brackets don’t pay income taxes, so cutting the payroll tax in half doesn’t do any good.

1) Double the home mortgage deduction for three years. This would lead to a decrease in forclosures as homeowners have double the incentive to pay their mortgage.
2) Tighten lending standards to avoid future so-called sub-prime mortgage fiascos. Banks and other lending institutions are already doing this.
3) Cut in half the payroll tax for three years. This lets the lowest income earners keep more of their income which they will use to pay their mortgages. This also allows renters an easier time of paying their rent.

Does this cost more than the 700B for TARP I and the 800B for the “stimulus” package? I dont know. Probably not. Besides, it would actually work.

I really do like the idea of getting ideas from the people, I am sure there a lot smarter people in our society than what is in our government.

I read two chapters, “The Broken Window” and the following one regarding Destruction”

My problem is it seems to portray a zero-some game and we should just live in mud huts. Of course I should read the whole thing, because I’m sure other ideas come into play in other chapters

Got to one. But I do want to finish this discussion. cd :O)

In order for the economy to become more stable, there should be more people heading towards that debt-free status – ie, nothing on credit, nothing owed.

I think the extra tax break would actually DISCOURAGE people from paying off their homes. Not a good idea in my book as it doesn’t promote that free of debtness that the economy needs to recover.

So, since my home is free and clear, if I go borrow the money as a home equity loan, put the money into savings and withdraw it for the paybacks, will I be able to recoup all the money back with the additional interest deduction? That’s the only way it would do me any good Could I make money at this? LOL!

Re: Renters – theoretically, they should get a break in lower taxes IF the landlord would pass thru the reduction in expenses…. however, that might not happen in all cases

@Kathryn: You wrote “To get more money circulating, we have to have more money circulating.”

To get more money circulating, we need to let fractional reserve lending work and encourage people to save, not to deficit spend (which is what this would do.) Our government has dropped interest rates to effectively 0, once again encouraging people to spend instead of save. But every dollar that is saved has at least as much positive effect as a dollar spent. That’s why this won’t help. Encouraging saving, and letting lending work properly instead of force-feeding banks money, is the only thing that will help us.

-Erica

Erica, you mentioned that Homeownership doesn’t directly spur the economy. I believe you may be missing the money that title companies, brokers, and banks make for one. Secondly, depending on the age of the house it helps, Hardware, Blinds, Landscaping, Appliances, Bedding, Paint, etc.

cd :O)