Instead of a socialist bailout of the banking, consumer and Wall Street hedonists, the Congress should have taken small steps in restoring a sound, functional economy instead of trying to patch, like a blown tire, a public and private economy based on spending, borrowing and massive debt.
One small measure that could have been taken would have included the elimination of taxation on all types of interest income. Saving should not be discouraged, just as excessive debt should not be encouraged. However, excessive debt has been encouraged and arguably even celebrated over the last 40 years since the Federal Reserve began tracking credit card debt, with the lone exception being the elimination of consumer loan interest deductions in 1986. But, not to worry consumerists, that deduction was soon replaced by a rapid increase in home equity loans, whose interest is generally deductible, by the deliberate public and private policies and strategies to inflate housing prices and promote debt over the last two decades.
Why should someone who strives to save $20,000 for a down payment for a $100,000 house ($80,000 mortgage) be penalized by taxation, while someone else who saves nothing for a $100,000 house ($100,000 mortgage) can theoretically deduct all of their interest expense from their taxes? Isn't it about time we reverse strategies and encourage saving and thrift and discourage excessive debt and rampant consumerism?
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