In general, I'm in agreement with you. However, there may be some benefit to the country as a whole in deductibility of some items. If you tax something you get less of it. If you subsidize something you get more of it. As a country, I think we're better off with more home ownership. Home ownership makes people more stable. We become less a nation of transients, moving from apartment to apartment. Deductibility of mortgage interest, being a subsidy, results in more home ownership. Besides the effect on society of increasing stability, home ownership also is a boost to our total economy in a lot of ways. If people are living in apartments they don't have the space to store all their nonsensical purchases that sit idle more often than they're used. Without driveways and garages, they don't have the space for parking their RVs and water toys. Home building, home improvements, and home maintenance expenditures all contribute a lot more to our economy than would be the case if we all lived in Soviet style apartments.
“Deductibility of mortgage interest, being a subsidy, results in more home ownership.”
I’ve bought several homes, and NEVER thought about the deductability of my interest. If that was needed for me to afford it, I couldn’t afford it.
“Without driveways and garages, they don’t have the space for parking their RVs and water toys.”
Surely you are joking...
I’ve spent a good part of my military life RENTING homes. Didn’t do any harm at all to me or to society.