The Gang Of Six

The Gang of Six have proposed a grand budget compromise.  They claim that CBO would score it as a tax cut, which means it includes massive tax hikes:

So how can this plan claim to be a “balanced approach” (which means higher revenues), yet also claim to be a $1.5 trillion tax cut?

This probably means they are using a CBO baseline that assumes the AMT continues as written today and that the current Bush rates expire. Last August, the CBO said those policies would amount to a $4.8 trillion tax hike. Which means the the Gang of Six plan probably raises taxes by about $3+ trillion over current rates.

Jonathan Chait notes that this could only move through the House with massive Democrat support and over Boehner's dead (or anyway, spending more quality time with the kids or in the private sector) body.

And bills raising revenue are supposed to originate in the House, so it may not even be possible for the Sente to arrange their fantasy vote.  They must be jealous of their House counterparts who managed the show vote on Tap, Shuffle and Twirl.

Comments

[Mikey]

It may be "I'll fated" but it is the only plan out there. I guess we will see how real the August 2nd deadline really is?

The house GOP should help the Senate and the President by passing a short term debt ceiling increase with spending cuts to give them more time to debate and score their plans.

[Captain Hate]

The August 2 deadline isn't real; there's adequate tax money coming in to satisfy the payments going out if prioritized properly. The JEF was playing his usual deceptive games on social security knowing full well that his MFM quislings wouldn't call him out on it.

But spending has to be cut, period. Failure to do that will sink the country no matter how many shell games these Senate pukes come up with. And they have to be real cuts; like immediately defunding Obamacare.

[JackisBack!]

We fly up to Vermont on August 2nd. Does this mean no TSA?

Yippeee!,

[pagar]

"but it is the only plan out there."????????

Looks like there is a least one more.

[steve]

I just don't get it. I understand the likes of Coburn want to reduce the deficit and don't care much about how they go about doing it, but is he stupid enough to think the Democrats are going to go along with any real spending cuts? Doesn't he know that all he will end up with is a bunch of tax hikes and ever-increasing spending?

[narciso]

'Chaitred' is always amusing, TM, It's a wonder how 'Sir Golfsalot' leverages his unbelievably weak hand, just like Steve Rattner berating Rupert for poor management
practices, unreal.

[Janet]

Here is a powerful pro-life video.
Exposing the epidemic of abortion in the black community..
Well, the MFM tells us that social issues are a loser so I guess it's a no-go.
I appreciate the MFM always lookin' out for us.

[Extraneus]

is he stupid[?]

Hanlon's razor

Never attribute to malice that which is adequately explained by stupidity.

[Jerome]

What a shame that Barry's Hollywood/Media Celebrity Birthday Blowout!!!! is going to be so somber, what with the Federal Government shut down and the United States of America redlining toward default and all of our retirees starving to death in the stifling attics of their grand kids homes.

Oh, well. You could have listened to the 800-something new conservative Republican lawmakers around the land who were elected in November with the single mandate of "CUT THE G-DAMN SPENDING NOW!"

But, nooooo...you wanted to play Gang of Pricks games.

[PD]

Coburn is saying the American people want "compromise."

Not this American. I want LESS SPENDING.

I want a reduction in the size of government, not a slowdown in the rate of growth.

I'm with steve: Does Coburn really think frontloaded tax hikes plus backloaded cuts will amount to anything but frontloaded hikes plus no backloaded cuts? Can anyone be so foolish?

[sam]

Raise taxes now, spending cuts never.

[Extraneus]

The House passed the debt ceiling increase last night. That should be the subject, not some nebulous deal hatched by a few wobbly senators, who aren't even permitted by the Constitution to raise revenue.

Why not get behind the House plan? Is it the urge to compromise, or something unseemly about forcing the Democrats to block the debt ceiling increase and accept responsibility for a government shutdown if they don't compromise?

The R's could all memorize a simple talking point, or keep it on an index card if they can't even manage that:

"President Obama has instructed Senate Democrats to block the House debt ceiling increase because it doesn't increase taxes. This is irresponsible. And since these are the same people who have run up the debt to such dangerous levels, it's unconscionable.

Even they know that increasing taxes at this time will weaken the economy further. Don't they care about that? Are they sabotaging the economy on purpose?"

The best defense is a good offense.

[narciso]

Matthew, really, poor brainslug: (h/t; RS McCain:

“The whole idea is to separate this idea of ideological warfare you [i.e., Buchanan] enjoy from the need to keep the government from default. You seem to be one of the happy Indians. By the way, the tea partiers, the original ones, dressed up like Indians and put on a little show. These guys are running around burning down houses. It’s a different kind of tea party,”

[RichatUF]

PD-

They are the Party of Stupid.

[Captain Hate]

Coburn left the group and then came back; not sure why he returned to come up with this pile of garbage. Maybe Durbin threatened to bring that economic retard McCain on board; although he could pretty much have his choice between most of the other Repuke squishes that stand in contrast to Rubio.

[Captain Hate]

Paul Ryan: "Leading on reporters in press conferences is not leadership".

[Melinda Romanoff]

PD-

Coburn, et al., are Senataurs, rare creatures that feed on anything for the good of their tribe. Their siren-like call is heard every six years or so, and is known for its seductive ability to entice cash and gifts from easily entranced individuals.

[narciso]

Well McConnell's dream team was Bennett, Grayson, Murkowski, (and a forth player, to be named later,) so what's the surprise.

[narciso]

From the Epic Fail, Down Under division:
(h/t; Tim Blair)

The PM’s aim is to have her backbenchers go out into their communities and sell the [carbon] tax to the punters …

When Parliament rises on Thursday, it will go into recess for five weeks for the winter break. Many MPs, however, will be planning to go on holidays and getting as far away as possible from the toxic environment of their electorates and this tax.

[Ben Franklin Forever]

Narciso;

You are becoming less opaque every day, but in the interests of all who desperately want to delve into your thought process, make a freakin' link.........

[pagar]

Have a look: "Currently on memeorandum:"

"Allen West / National:
At this Point, Anyone with an Obama 2012 Bumper Sticker is a Threat to the Gene Pool"

GO ALLEN!

Hey, the whole story has disappeared. Amazing! Did anyone catch it?

[Ben Franklin Forever]

(Reuters) - More than 1,000 beef cattle that ate feed contaminated with radioactive cesium have been shipped all over Japan from Fukushima and other prefectures, Kyodo news agency reported Wednesday, adding to anxiety after the world's worst nuclear crisis in 25 years.

http://www.reuters.com/article/2011/07/20/us-japan-nuclear-beef-idUSTRE76J38820110720

[Thomas Collins]

See LUN for cautionary notes from Craig Pirrong. I hope the House GOPers take the following thoughts from Pirrong to heart:

"In the current debt limit standoff, the problems of enforceability are insuperable. There is no way in hell to make Obama or the Congressional Democrats or future Congresses or future presidents live up to promises to cut future expenditures. And to put it mildly, Obama’s incentives to promise today and renege tomorrow are huge. He wants a deal today to reduce the salience of debt and deficits as a campaign issue in 2012. If that succeeds, and he is reelected, he has every incentive to renege.

Which means that the only feasible deals are those that involve contemporaneous performance–e.g., raising taxes and reducing spending in this year. Feasible for non-suckers, that is. And if that deal is not acceptable to Obama, then there should be no deal whatsoever. It would be better to raise the debt ceiling with no strings attached, and fight it out on the tax-and-spend issue in 2012."

The reality upon which Pirrong focuses is not a pleasant one. But reality it is. It's time to cut a small deal and focus on 2012.

[narciso]

Memeorandum is like Orwell's memory hole, pagar, 'the increased chocolate ration, the
exploits of Cpl. Ogilvy on the Malabar front,
and alternately unperson Ogilvy,' all are featured, until they don't.

So Moody's is downgrading five states, including South Carolina, and Virginia, who
are trying to deal with it, putting it in
the same basket as Maryland, curious no.

[narciso]

The last comes from this link:

http://www.the state/2011/07/20/19041021/moody's-eyes-credit-downgrade-html/

[Ben Franklin Forever]

"It would be better to raise the debt ceiling with no strings attached, and fight it out on the tax-and-spend issue in 2012."

From the pov of GOP that sounds about right. But, as you know
there are all those pledges signed, and the cost of cleaning up
brain matter might just exceed future savings.

[Melinda Romanoff]

The ratings agencies are merely trying to play the relevancy card after blowing it on the recent ABS gloss-over they did for the prior 10 years or so.

[sbw]

Here's help for Narciso's link: http://www.thestate.com/2011/07/20/1904102/moodys-eyes-credit-downgrade.html

[Ben Franklin Forever]

Marshall Auerback: The European Monetary Union is the Titanic
By Marshall Auerback, a portfolio strategist and hedge fund manager. Cross posted from New Deal 2.0

The Iceberg Cometh: An economic and financial crisis will soon be brought about by the collapse of the European Monetary Union. And everyone goes down with the ship!

In the past, I have called the euro zone a “roach motel”. But as usual, I’ve been outdone in the metaphor design department by the Italians: Guilio Tremonti, the Italian Finance Minister, last week compared Germany and its small-minded Chancellor Angela Merkel to a first-class passenger on the Titanic. The underlying message is the same: You can be sailing in coach or you can be in the 1st class compartment. But when the ship hits the iceberg, everybody goes down together — Germans, Italians, Greeks, Irish and French alike. All euro zone members have an institutional wide problem of not being able to fund deficits, given that the countries of the euro zone have all acceded to impose gold standard conditions on themselves by forfeiting their fiscal freedom."

Gold? Hell, just mint $100k platinum coins....craven genius.

http://www.nakedcapitalism.com/2011/07/marshall-auerback-the-european-monetary-union-is-the-titanic.html

[Clarice]

Narciso, I don't understand why with the new typepad feature that automatically hyperlinks urls you are having trouble. Just cut the url and paste it in the post. You don't have to do another damn thing to get a hyperlink now.

[Danube of Thought]

Minus 17 and 44 overall at Raz today.

[Ben Franklin Forever]

For the most part, candidates for the GOP presidential nomination have avoided inflammatory rhetoric about the military threat represented by China. While former House Speaker Newt Gingrich has warned of the dangers of an electro-magnetic pulse (EMP) attack against the United States, China specifically does not figure prominently in his rhetoric. Rep. Michelle Bachman's critique of China is limited mostly to the economic realm, saying recently, "With all the money that we owe China, I think you might correctly say, Hu's your daddy." One of the selling points for John Huntsman's candidacy is the business opportunities generated by his recent ambassadorship to China. Similarly, Mitt Romney has emphasized China's role as both an economic competitor and economic partner, more than as a military threat. Tim Pawlenty has argued that the United States should try to achieve China-like rates of GDP growth. Of the notable Republican candidates, only Rick Santorum of Pennsylvania has sounded a note of warning about China's military ambitions, faulting President Barack Obama for "acquiescence to China's saber-rattling in the South China Sea."

http://www.worldpoliticsreview.com/articles/9527/over-the-horizon-chinas-military-threat-a-tough-political-sell

[Clarice]

Still looking good, DoT. BTW it's going to be 116 here today. Are you sure the East Coast is where you want to be?

As for the Euro's collapse, my own feeling is that it just makes the $ look comparatively better.

[Captain Hate]

The ratings agencies are merely trying to play the relevancy card after blowing it on the recent ABS gloss-over they did for the prior 10 years or so.

Yep, it's really unfortunate that some reputable entity didn't fill the vacuum when they were obviously shading things; although we're talking about a closed oligarchy here.

[squaredance]

The house bill is just CYA, kabuki nonsense.

The Senate GOP will cave, the pressure will be put on the GOP in the House in conference and soon they will cave as well. t wll all be over by 8/15/ It will be a disaster to the GOP.

There will be a debt ceiling raise, no real spending cuts and more taxes. Obama will get the credit for the resolution of this almost wholly contrived "crisis". He will actually increase spending, and he will use the new money as a slush fund for re-election. The media will pound away day and night; e may well get re-elected. The GOP will be challenges just to hold their majority in the House.

The election of 2010 as in effect been now thoroughly nullified. The core GOP old timers are not conservatives, and in fact have contempt for them. They are just the gelded circus horse of the Establishment left, munching their apples in their cozy stables. The Establishment of both Parties could care less about this Nation.

Argentina is the model: Once they lost their liberties and values they ever returned to them (or to prosperity).

It s now or never, and it is a pretty shrewd bet that it will be Never.

[Ben Franklin Forever]

"a closed oligarchy here."

When times are good, no one wants to appear 'negative' especially when the markets are composed of labile hysteria. Honest brokers are seen as spoilers.

[Melinda Romanoff]

Cap'n-

Someone did.

Morningstar.

And they are awesome in their clarity.

[Ignatz]

--but in the interests of all who desperately want to delve into your thought process, make a freakin' link........--

There are none quite so fervent as the recently converted.

[Melinda Romanoff]

They took a third of the deals out there, this year, after starting in June of last year from scratch.

They know what they are doing, and they are taking considerable marketshare from the credibility vacuum created by the old guard.

Oh, and they don't borrow a dime.

Joe has an amazing crew there.

[Chubby]

((All euro zone members have an institutional wide problem of not being able to fund deficits, given that the countries of the euro zone have all acceded to impose gold standard conditions on themselves by forfeiting their fiscal freedom."))

I've been exploring enemy territory in the past couple of days, and I watched a video where Warren Buffet said the exact same thing as the cite above -- that Greece's financial woes are besed on it having givn up its right to print its own money.

He also said employment in the U.S. will come back when housing comes back and expects a huge resurgence in the economy within the next 5 years. He thinks Obama's rhetoric about corporate jets is nonsense but he is for tax increases on the super-superrich.

[narciso]

Charlemagne, Napoleon, Hitler, something tells me a United Europe was not going to work out, but that's just me,

[Melinda Romanoff]

PL-

The EU parliament controls the money stock, not the ECB. So, you can imagine how well that works.

[Thomas Collins]

Ben Franklin Forever, I think the brain matter of the Tea Party aspect of the GOP is just fine as it relates to the analysis that the USA is on a path that simply can't be sustained. We can't become a Eurosocialist state, because there is no USA to play Sugar Daddy to us in terms of defense the way we have infantilized Europe and allowed Europe to pursue their social state with minimal defense muscle dreams. I simply think the Election of 2012 is the time to press this, not now.

By the way, Ben Franklin Forever, are you trying to get folks who engage with you to call you BFF? Isn't that a little too "teenagery" for the average age of JOMers? :-))

[Ben Franklin Forever]

Iggy;

So much for my 12-step program. Your addiction, yet to be addressed is; stating the obvious.

Can we expect your conversion sooner, or later?

[Captain Hate]

Morningstar.

And they are awesome in their clarity.

Ahhh, thanks for the correction. They were essential for me when I used to handle my mutual funds.

[narciso]

Oh, there's no way that could possibly go wrong could it.

[Danube of Thought]

Here's a freakin' link all persons of good will can enjoy.

[Ignatz]

--Your addiction, yet to be addressed is; stating the obvious.

Can we expect your conversion sooner, or later?--

In a world which commits most of its time to sedulously ignoring the unpleasant but obvious I usually consider myself the voice of one crying in the wilderness, so I'd bank on later.

[Danube of Thought]

The east coast is the last place I want to be. But we're headed to Philly tomorrow for my mother-in-law's memorial service. Gonna be grueling.

[Ben Franklin]

"are you trying to get folks who engage with you to call you BFF?"

GAWD! I didn't see that coming. thx

[Ignatz]

--I've been exploring enemy territory in the past couple of days, and I watched a video where Warren Buffet said the exact same thing as the cite above -- that Greece's financial woes are besed on it having givn up its right to print its own money.--

Many people are saying this but unfortunately it is utter rot.
If Greece still had or now went back to the drachma, the only solution open to it would be a massive devaluation which would set the stage for its recovery eventually but would also result in a massive destruction of their standard of living.
Greece's financial woes are based almost entirely on their desire to live above their means, regardless of what currency denominates their profligacy.
The piper doesn't care what he gets paid with but he always gets paid.

[Ignatz]

--for my mother-in-law's memorial service--

The vile banshee is no more?

[Captain Hate]

Charlemagne, Napoleon, Hitler, something tells me a United Europe was not going to work out, but that's just me

The EU was always based on the pipe dream that countries would willfully surrender the autonomy which had existed for centuries at a time when, if anything, more regional identities were being pursued. It had all the appeal of communism.

[Clarice]

Oh, dear, DoT. Drik a lot.

narciso:
"Charlemagne, Napoleon, Hitler, something tells me a United Europe was not going to work out, but that's just me,"

Fabulous and so narcisoisticly wry.

[Ben Franklin]

Thomas;

Re the body of your comment; you packed a lot of dynamite in that paragraph. In defense of Obama, he has pushed NATO allies for more expenditure and participation (direct).

As to your other point, I agree that (from GOP perspective) winning 2012 would be a greater victory than some symbolic tax averse legislation, this year.

[Melinda Romanoff]

Cap'n-

I imagine you registered for the free stuff there, but today's interview with Jeff Gundlach is a gold mine of information on the state of today's bond market.

[Ignatz]

Thomas Sowell reflects on tax rates for a world averse to the obvious.

[Captain Hate]

I imagine you registered for the free stuff there

Good to know that my frugality *cough* cheapness *cough* inadvertently is communicated across the inertubez.

[narciso]

Thomas Lifson, does a good overview, of how bad this Gang of Six deal is:

[Melinda Romanoff]

I would think that would be de riguer at this site.

[Jane]

Dot,

Where are you going on the east coast?

[Clarice]

*DriNk a lot*

[Danube of Thought]

The vile banshee is no more?

Correctamundo.

[narciso]

Isn't it ironic, how 'the naarative' ha little to do with the truth:

Political donations by News Corp., its employees and their families were evenly split between Democrats and Republicans, with President Obama the all-time leading recipient, according to a report from the Sunlight Foundation.

The transparency watchdog noted Tuesday that Democrats received 51 percent of contributions while Republicans received 49 percent, despite the firm's highly publicized links to the GOP, such as a $1 million donation to the Republican Governors Association in August.

[Jane]

Oops, I should have kept reading. My niece is in Philly and she expects it to be 103 tomorrow.

I've had the air conditioner on for 3 straight days which is a record for me. I hate the heat but I am very frugal.

[Ben Franklin]

It’s broiling hot in Cairo’s Tahrir Square. For the second time in a year, furious Egyptians have packed the epicenter of this year’s revolution against Hosni Mubarak, trying to regain their stalled momentum from reactionary forces in the military. Once again, Ahmed Maher, a top social media activist, is in the thick of it — and not without controversy.

“We’ve got 70 percent of our demands,” Maher tells Danger Room in a wee-hours phone call from Tahrir. Hours before we spoke, the interim government sacked its cabinet due to the renewed popular unrest. “One or two more weeks” on the streets is all Maher thinks it’ll take to get “a total change of the regime, not just a small change.”

But the organization he helped start is showing signs of internal strain — especially as an American PR firm promotes Maher’s efforts, prompting questions online about his authenticity. Maher says it’s all a misunderstanding.

http://www.wired.com/dangerroom/2011/07/egypt-social-media-activist/

[Clarice]

Here's the link to Narciso's post on the Gang of Six proposal:http://www.americanthinker.com/blog/2011/07/gang_of_six_gambit_revives_spending_shell_game.html

[Jane]

BTW harry Reid has been showing a lot of signs of dementia lately. I think that needs to be discussed - everywhere.

[Ben Franklin]

'freakin link'.........

Yeah. You keep puttin' that spurious scripture up as though the Canon deemed it 'inspired truth' Unfortunately, you got it from your personal 'Oracle', and that's the snake-headed credibility you prefer.

[narciso]

Btw, I have a new post based on my musings, on Daniel's Silva's latest 'Portrait of a Spy'

[Melinda Romanoff]

OK, I'll bite, Jane.

How can you possibly tell there's been a change?

[Captain Hate]

BTW harry Reid has been showing a lot of signs of dementia lately. I think that needs to be discussed - everywhere.

How can you tell; he hasn't made any sense for at least a decade and has always been a partisan hack who, in a just world, would be in a managed care facility.

[centralcal]

DoT: Sorry to hear about your M-I-L. But, oh, I will miss the Vile Banshee references.

[Captain Hate]

Mel beat me by a minute.

[centralcal]

Gee, I thought Dingy Harry had been suffering from dementia for years, just like Nancy Pelosi. It is almost a requirement for Democrat pols, isn't it?

[Melinda Romanoff]

"Winning!"

[narciso]

He is the closest thing to G.D, Spratlin
's Senator Geary, from the Godfather series.
Although one of the Smothers Bros,(the serious one) captured his oleaginous mien in
'Casino' as Sen. Harrison.

[Jane]

How can you tell; he hasn't made any sense for at least a decade and has always been a partisan hack who, in a just world, would be in a managed care facility.

More reason to keep up the chatter.

An anonymous worker in his office called and told me he was very worried, and I trust him completely. Harry Reid is a danger to himself.

Pass it on.

[Mikey]

Does anyone know if the gang of six proposal eliminates mortgage interest deductions? That can't be legislated away in 2 weeks. Imagine he average American homeowner waking up on august 2nd happy they passed this legislation only to find out your taxes went up dramatically.

[Captain Hate]

An anonymous worker in his office called and told me he was very worried, and I trust him completely. Harry Reid is a danger to himself.

Well, he fell recently while jogging; maybe he was chewing gum at the time. He sounds like he just came out of the TB ward or, at the very least, needs to suck hard on an inhaler. Plus he looks like he smells of cat piss and mildew.

Other than that, he rivals Larry King in looking marvelous.

[Jane]

Actually if you are going to eliminate mortgage interest deductions this seems like a good time since interest rates are so low.

[glasater]

I went to your web site Narciso and couldn't find it...

[narciso]

The truth, it burns:

*The top recipients of donations from News Corp from 1989 to 2010 have all been Democrats, according to the Sunlight Foundation. The top three are recorded as: Barack Obama ($368,669), Hillary Clinton ($298,525), and John Kerry ($157,901) (I wonder how the Fox audience likes this)

[Ben Franklin]

Well, those donations definitely make Murdoch as clueless as he was during his spanking in the UK, yestiddy.

[Jim Miller]

Here's a post explaining why Australian Prime Minister Julia Gillard is in trouble with her voters.

It isn't the economy, it isn't even her poor taste in live-in boyfriends.

[Rick Ballard]

Ignatz,

Comparing the IRS data from 2001 and 2008 (easy to read Excel spreadsheets) provides a very stark illustration of the veracity of Sowell's premise. In 2001 producers with income above $200K furnished 41.3% of the total individual take, paying at a rate of 30.4%. By 2008, with the Bush tax cuts, the same group was furnishing 52% of the total take at a rate of 26.1%. The number of returns filed by that group grew from 2,563,835
in 2001 to 4,345,882 in 2008 for an increase of 41% while the amount of revenue taken from the group increased by 32%.

Mel,

I have a deep suspicion that the Aug. 2 "deadline" is tied to the July 29 BEA report on Q2 GDP. The Daily Treasury Report (Table III-C Debt Subject to Limit) shows a balance $25 billion below the "ceiling" but I believe that to be an accounting fiction as risible as the suggestion that the President possesses superior intelligence.

Geithner/Obama are trying to choreograph a game of pin the tail on the Republicans regarding market reaction to what is going to be an absolutely atrocious BEA report. Today's housing report should pull the consensus estimate on Q2 down to 1.2-1.4%.

That ain't a B+, BOzo.

[MayBee]

Actually if you are going to eliminate mortgage interest deductions this seems like a good time since interest rates are so low.

Oy.

[Ben Franklin]

Which British politician has Rupert Murdoch met most?

By Tim Montgomerie
Follow Tim on Twitter.

Yep, Gordon Brown.

Let's record for posterity that during his evidence to today's special meeting of the Culture and Media Select Committee Rupert Murdoch said:

(a) The British politician he met most in recent years was Gordon Brown;

(b) At those meetings Brown never once raised phone hacking;

(c) Their children played together;

(d) Their wives became friends;

(e) Like Cameron, Brown preferred Mr Murdoch to enter 10 Downing Street by the back door.

It puts all of that faux outrage from Brown, last week, in
perspective.

http://conservativehome.blogs.com/leftwatch/2011/07/which-british-politician-has-rupert-murdoch-met-most.html

[Barbara]

Plus he looks like he smells of cat piss and mildew.

That is too funny, Captain H! You do have a way with words.

[narciso]

It's a rough post, but more than my original comments:

[narciso]

Sorry, the link is at narcisoscorner

[Danube of Thought]

The description I heard was that the mortgage interest deduction was going to be reduced for loans in excess of $500K.

[Danube of Thought]

Dana, your tells are quite stark. Give it up, dope.

[MayBee]

Quick expansion on my oy:

Interest rates may be low, but
- not everybody has the current low interest rates because they don't have a recent mortgage
- much of the country is already under water on their mortgages, so even a low interest rate on an inflated mortgage value is good money
- if you are underwater on your mortgage and your house will not appraise for the amount of your mortgage, you cannot refinance to get lower rates
-the assumption of mortgage interest deduction is built into the price of the home. Many of which are under water. So people purchasing homes in the future will want to pay even less, knowing that their costs are going to be higher. This will bring the value of the house down even further
-if and when interest rates go up, the tax deduction will still be capped

The better time to reduce the deduction was when the housing market was overheated. Now, it's depressed, and this will further depress it.

[Melinda Romanoff]

Not sure what point #2 is, but everything else is spot on.

[MayBee]

Me, mel?

[Danube of Thought]

Concur with Mel.

[Melinda Romanoff]

Yesss, MayBee.

[MayBee]

I'm trying to say that even with low interest rates, on a large mortgage the deduction is still quite valuable.
Not sure why I tied that into being underwater right there, except that it is some solace (and incentive!) to the homeowner making payments on an underwater mortgage.

[Jane]

Maybeee,

That's not a recommendation from me. My first mortgage was 14% adjustable. This is nothing.