Minneapolis Fed Chief Questions Tax Incentives For Household

Lowering the fraction of mortgage interest households are allowed to deduct from their taxable income would help protect the financial system in the event of another housing boom and bust, Minneapolis Fed President Narayana Kocherlakota said.  This is a very dangerous statement as the Fed Chief apparently believes that by allowing home owners to deduct interest from their mortgages that the same homeowner is more willing to take on higher risk in the form of increased debt. Personally I do not agree with this statement, and by making any changes to the current tax code that reduces the home owners ability to deduct interest would harm the housing market. For more information on the Fed Chief's remarks go here.