Wednesday, February 22, 2006

Rising Housing Bubble Floats Many Middle Class Losers

In Business Week, Michael Mandel makes a nice correlation between rising home values and the Democrats inability to get any traction criticizing the borrow and spend Republican economic policies.

Middle class workers aren't feeling the decline in real earnings--about $1,100 per year, between 2000 and 2004--because more of them own homes and have offset those losses through the wonder of home mortgage refinancing.

A downturn in the housing market bodes ill for Republicans, so Bush probably thinks he did his party good when he recently turned a question about making housing more affordable into an opportunity to state reassuringly,
"I don't think you have to worry about the mortgage deduction not being a part of the income-tax law."

1 comment:

Thersites D. Scott said...

What's amazing is that a council the WH put together to look at tax law actually made that recommendation -- to remove the mortgage interest deduction! I think that was a non-starter even with Bush.