Stein: Eliminating mortgage deduction is "foolish"

(CBS News) The battle over how to reduce the federal deficit continues this week in Washington. One of the suggestions under consideration doesn't pass muster with our contributor Ben Stein:

My late father, the economist Herbert Stein, had a few favorite quotations.

One of them was from a European thinker named Oxenstierna, if I have that name right. The quote went simply, "Observe, my son, with what little wisdom the world is governed."

This comes to mind as our nation is convulsed by fiscal problems, especially a titanic budget deficit.

This bipartisan mess, caused by GOP tax cuts that went too far and Democrat spending that went too far, is stirring talk of the need for tax increases and spending cuts.

Some of this - tax increases on the very rich - makes perfect sense to me.

But one of the ideas getting noodled around is just plain foolish. That's the idea of junking or severely limiting, the deduction for tax purposes of interest on home mortgages.

Look, we are just barely limping off the bottom of a residential housing catastrophe, and home buying and building are finally, after a genuine nightmare, reviving.

If we could get housing roaring back, that would go a long way towards full recovery for our economy.

Obviously, taking away the home mortgage interest deduction is the very last thing the housing market needs.

I'm not saying it would hit every home buyer, but a home is an investment. If we lower the return on an investment, well, you get the picture.

This bad idea is apparently meant to substitute for tax increases on the wealthy. But this is strange. The rich, by definition, are RICH. That's why they are CALLED "rich." They can afford to pay more tax.

The middle income home buyers, or some of them, need that home mortgage interest deduction to buy.

So we have the question: Do we want to clobber housing, hurting millions of homebuyers, builders, construction workers and timber people? Or tax the people who have two Cadillacs and a Bentley?

How can this even be an open question?

Observe, my friends, with what little wisdom the world is governed.