Abstract

The author situates a review of federal housing policy within a discussion of common sense, and focuses the discussion on public policy issues associated with the effects of changes in the home owner's mortgage interest tax deduction. By considering questions relating to common sense, qualitative and quantitative induction, and certainty, the author structures a rationale and method for the choice of appropriate policy analysis tools for this and related housing policy questions. Housing policy is examined in the context of chaos, akrasia, free market assumptions, and of rational expectations theory. Using the inquiry method derived, the author argues for lowering the upper limit of principal for which mortgage interest can be deducted by $100,000, and also recommends a later review of further reductions in the mortgage interest deduction