Reply #6: I suspect that the deductibilty of mortgage interest is one of the things [View All]

[AP]

keeping the bubble from bursting. If you load up more debt on your house, you get it back from a lower income tax burden.

So, as long as you have an income tax burden greater than what you pay in interest, you break even in the short term on your debt, no?

I guess the problem is when your interest payments exceed your federal tax burden.

The other problem is that the federal government is subsidizing the debt -- we loose more and more money from the public purse the more money people borrow against their homes.

If there's no knock-on economic benefits from that debt, then we're all in trouble.