My pal John Tamny edits the wonderful RealClearMarkets site, my first read every morning. He writes for it as well and just turned out a great piece of commentary on why we should dump the sacred mortgage interest deduction. The money graf:
Perhaps worst of all for our economic health, the mortgage-interest deduction drives capital away from the productive sector of the economy, and into the ground. Nineteenth century economist John Stuart Mill called the latter "unproductive investment," whereby capital is consumed rather than offered up as investment. This should concern all Americans, because to the extent that tax incentives create individual preference for consumption over savings, investment lags, and with lower investment comes lower wages.
Please, read the whole thing.