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2008 Republican Platform: No Bailouts

2 min readBy: Gerald Prante

From the 2008 Republican Platform:

Rebuilding Homeownership

Homeownership remains key to creating an opportunity society. We support timely and carefully targeted aid to those hurt by the housing crisis so that affected individuals can have a chance to trade a burdensome mortgage for a manageable loan that reflects their home’s market value. At the same time, government action must not implicitly encourage anyone to borrow more than they can afford to repay. We support energetic federal investigation and, where appropriate, prosecution of criminal wrongdoing in the mortgage industry and investment sector. We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself. We believe in the free market as the best tool to sustained prosperity and opportunity for all. We encourage potential buyers to work in concert with the lending community to educate themselves about the responsibilities of purchasing a home, condo, or land.

Republican policy aims to make owning a home more accessible through enforcement of open housing laws, voucher programs, urban homesteading and – what is most important – a strong economy with low interest rates. Because affordable housing is in the national interest, any simplified taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. system should continue to encourage homeownership, recognizing the tremendous social value that the home mortgage interest deductionThe mortgage interest deduction is an itemized deduction for interest paid on home mortgages. It reduces households’ taxable incomes and, consequently, their total taxes paid. The Tax Cuts and Jobs Act (TCJA) reduced the amount of principal and limited the types of loans that qualify for the deduction. has had for decades. In addition, sound housing policy should recognize the needs of renters so that apartments and multi-family homes remain important components of the housing stock.

And the Republican platform also does what the Democratic platform does, which is give lip service to simplifying the tax system yet say that special preferences (like MID) that complicate the system should stay. I'd ask the economically ignorant writers of this platform to answer this question: "What has been the social value of the home mortgage interest deduction?" I'd like a number please that proves that government subsidizing housing through MID exceeds its opportunity cost. Such a number does not exist.

As for the last sentence regarding rental units, what does that even mean? It means nothing. It just sounds good.