"...its nice that you can deduct interest payments /"


               petr - In the end--though I suppose the end isn't quite here yet--it wasn't nice at all. What happened was this: the only interest one could deduct on taxes, barring businesses, was interest on mortgages. The people who were having to pay rent on a house really took it in the shorts every April 15th. That's probably the main reason people were motivated to try to buy a house, even if they really couldn't afford it.
               The other element in all of this was the fact that folks who, say, wanted to buy a new car could get a second mortgage on their home, and they could deduct the interest on that mortgage as well. Then they started buying boats, motorcycles, trips abroad, custom built hunting rifles, vintage guitars, motor homes, and Jeeps to pull around behind them, and..
               Once interest rates went up just a little bit, a lot of people found themselves in really deep shit. And once those people bailed, it put more pressure on the others, and then they had to bail, and...

               When this whole thing started gaining steam after the dot-com boom in late 2000, you could have scraped any old wino up off the sidewalk in, perhaps, Bohunk, Indiana, and he could have told you that what we're experiencing now was exactly what was going to happen. Unfortunately, out elected public officials couldn't figure it out.