Response to Weekly Radio Address

http://www.change.gov/page/s/economy

We need to phase out the mortgage interest deduction.  It doesn't increase homeownership (Canada's rate is about the same as ours without one), it's regressive, it's the biggest deduction in the tax code, costing more than twice the annual HUD budget, it encourages borrowing (like ill-advised interest-only loans) when we should be encouraging saving, and it skews housing production toward high-end homes (often second homes, vacation homes, investment properties, etc.) when we have a national affordable housing crisis.  Grandfather people who've already used or started using the mortgage interest deduction, then give others the option of choosing either the mortgage interest deduction, OR a one time, universal, fully refundable $5000 tax credit to buy their first home.  They'd still have to have adequate incomes and credit histories, reducing the risk of the kind of mortgage crisis we've just seen.  And such down payment and closing cost grants have been shown to help 1 in 9 renters become homeowners, which would also help prop up the real estate market.

Green jobs--yes.  Any auto bailout must include stricter requirements on auto manufacturers to make more fuel efficient cars.  Why don't they make buses, trains, and bicycles?  Those are the future and should be a condition of getting $25-50B.  They should also have to stop exporting jobs, and if we taxpayers are going to give them tens of billions of dollars, we deserve a fair amount of preferred stock and/or other say in the management of these companies.  Failed management shouldn't be rewarded with massive strings-free bailouts.

We need a major investment in transportation and other infrastructure.  We need to overhaul our badly outdated funding practices to spend only what's required to maintain existing roads and bridges, not expand or build new ones.  The federal government should be spending far less on roads and more on green transportation options.  That must include pedestrian and bike as well as transit infrastructure.  They are best for our physical, economic, social, and environmental health.  They are also the most cost-effective.  And with rising costs of construction materials and the inability of nearly every state and municipality to run deficits, the federal government alone is truly able to afford these necessary, job-creating investments.

Spend more on education, health care, job (re)training, trade adjustment assistance, unemployment benefits, Medicaid, TANF, food stamps, SSI, Head Start, IDEA, school construction, Pell Grants, CCDBG, SSBG--those are all productive investments, many of which are chronically underfunded--which would strengthen our safety net and create more jobs.  

Nominate Rep. Earl Blumenauer or Gov. Parris Glendening for Transportation Secretary.

Thank you.

Tags: Economy, Education, Energy, Environment, Health care, housing, obama, Taxes, transportation (all tags)

Comments

3 Comments

speaking strictly...

as a canadian....

the mortgage interest deduction is highly envied over here.  but as you say - most of my american relatives/friends use this privilege to borrow against their credit for purchases which i guess has economic implications that are not wanted.

by canadian gal 2008-11-22 05:59PM | 0 recs
Re: speaking strictly...

You barely have interest-only mortgages up there, and the whole mortgage and home lending situation is different.  Your mortgages are amortized over 25 years instead of 30, and people focus on paying off their debt rather than minimizing their monthly payment.  Your economy, particularly in banking and real estate, are thus sturdier and in far less jeopardy than ours.  I owned a condo in Montreal after selling my co-op apartment in DC.

by Sandwich Repairman 2008-11-22 06:26PM | 0 recs
Re: speaking strictly...

i agree.  we also have FAR more regulation....

by canadian gal 2008-11-22 07:14PM | 0 recs

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