Home mortgage interest deduction

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Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier by Edward L. Glaeser

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affirmative action, Andrei Shleifer, Berlin Wall, British Empire, Broken windows theory, carbon footprint, Celebration, Florida, clean water, congestion charging, declining real wages, desegregation, diversified portfolio, Edward Glaeser, endowment effect, European colonialism, financial innovation, Frank Gehry, global village, Guggenheim Bilbao, haute cuisine, Home mortgage interest deduction, James Watt: steam engine, Jane Jacobs, job-hopping, John Snow's cholera map, Mahatma Gandhi, McMansion, megacity, mortgage debt, mortgage tax deduction, New Urbanism, place-making, Ponzi scheme, Potemkin village, Ralph Waldo Emerson, rent control, RFID, Richard Florida, Rosa Parks, school vouchers, Seaside, Florida, Silicon Valley, Skype, smart cities, Steven Pinker, strikebreaker, the built environment, The Death and Life of Great American Cities, the new new thing, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, upwardly mobile, urban planning, urban renewal, urban sprawl, William Shockley: the traitorous eight, Works Progress Administration, young professional

Environmental concerns should push toward a tax policy that encourages thrifty living in modest residences. The home mortgage interest deduction pushes us in the opposite direction, encouraging people to buy bigger homes, which are often suburban. The post-World War II move to enclaves like Levittown and The Woodlands was fueled by pro-home-ownership tax policies. I’m happy for people to enjoy the pleasures of large houses on large lots, but there is little reason why federal tax policy should subsidize those who buy big. A simple way to ease this problem without harming middle-class Americans would be lowering the upper limit on the home mortgage interest deduction to some more modest figure, like $300,000. The home mortgage interest deduction is part of a seventy-year-old federal push toward home ownership. Government-sponsored enterprises like Fannie Mae and Freddie Mac long received implicit and now receive overt federal funding to encourage the mortgage market.

I’ve already discussed the problems that come from expecting cities’ richer residents to pay for the needs of the poorer ones. An antiurban bias is even more obvious in housing and transportation policy, which seems almost intentionally designed to hurt the cities that enrich their countries and the entire world. The centerpiece of federal housing policy is the home mortgage interest deduction, which allows home owners to deduct from their taxes the interest on up to a million dollars of mortgage debt. Because more than 60 percent of Americans are home owners, this policy has become politically inviolate, but it is deeply flawed. The home mortgage interest deduction is a sacred cow in need of a good stockyard. It encourages Americans to leverage themselves to the hilt to bet on housing, which looks particularly foolish in the wake of the great housing bust of 2006-2008. Subsidizing home ownership actually pushes up housing prices by encouraging people to spend more.

The government should not be in the business of enforcing lifestyles that we happen to find appealing. The government’s job is to allow people to choose the life they want, as long as they are paying for the costs of that lifestyle. Yet today, public policies strongly encourage people, including me, to sprawl. I doubt that I would be in the suburbs if it weren’t for the antiurban public policy trifecta of the Massachusetts Turnpike, the home mortgage interest deduction, and the problems of urban schools. Eliminating pro-sprawl policies won’t bring back every declining city, and it won’t kill the suburbs, but it will create a healthier urban system whereby walking cities can compete more effectively against the car. The stakes are even higher in the developing world, where cities are more fluid and where a wholesale move to American-style sprawl would mean a massive rise in driving and energy use.


pages: 251 words: 76,128

Borrow: The American Way of Debt by Louis Hyman

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asset-backed security, barriers to entry, big-box store, cashless society, collateralized debt obligation, credit crunch, deindustrialization, deskilling, diversified portfolio, financial innovation, Ford paid five dollars a day, Home mortgage interest deduction, housing crisis, income inequality, market bubble, McMansion, mortgage debt, mortgage tax deduction, Network effects, new economy, Paul Samuelson, Plutocrats, plutocrats, price stability, Ronald Reagan, statistical model, technology bubble, transaction costs, women in the workforce

While the wonks debated, Reagan gave a speech in May 1984 to the National Association of Realtors, reassuring them that “in case there’s still any doubt, I want you to know we will preserve the part of the American Dream which the home-mortgage-interest deduction symbolizes.”3 Mortgage debt had long been thought of as “good” debt, which was why it was protected during the tax reform. Since the 1930s, when the FHA had made good housing a national project, Americans had been encouraged to take out long-term mortgages and buy a house. Owing a mortgage was not just a financial choice, it was a sign of adulthood and the imprimatur of middle-class success. While a mortgage signified maturity, credit cards signified fun. In the middle of the debates stood a few sacred cows: lower tax rates, steady government revenues, and the home mortgage interest deduction. While the deduction for mortgage interest had been tabled, however, all the other distortionary deductions, such as the interest on cars, credit cards, and all other consumer purchases, were still up for debate.

The idea of personal borrowing was inconceivable to the framers of the tax code, and thus all interest was deductible. Only when the income tax began to encompass everyone after World War II did the interest deductions begin to affect taxes—and for the postwar home owner, they were fantastic. All the interest paid could be deducted. What incentive, then, was there not to borrow? Only those who took the standard deduction—that is, most renters—lost out. For home owners who took the mortgage interest deduction, the deduction effectively cut the cost of their borrowing by a third or a half. Interest on top of that was also subsidized. Borrowing wasn’t saving, but it was not nearly as pernicious as it would have been in the absence of the deduction. Unsurprisingly, between tax incentives and rising incomes, the middle class borrowed far more frequently than either the poor or the rich.


pages: 93 words: 24,584

Walk Away by Douglas E. French

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Elliott wave, forensic accounting, full employment, Home mortgage interest deduction, loss aversion, McMansion, mental accounting, mortgage debt, mortgage tax deduction, negative equity, New Journalism, Own Your Own Home, Richard Thaler, Robert Shiller, Robert Shiller, the market place, transaction costs, unbiased observer, wealth creators

With the American public becoming addicted to credit in the 1970’s and the Treasury looking for more tax money, the deductibility of consumer interest payments, including mortgage interest, became a target of the Congress. Whether it would really make a difference for home values or not, President Reagan wasn’t going to mess with the mortgage interest deduction, telling the National Association of Realtors in 1984, “I want you to know that we will preserve the part of the American dream which the home-mortgage-interest deduction symbolizes.” Two years later, Congress ended the deductibility of interest on credit-card and other consumer loans in the tax-reform act of 1986, but left the mortgage deduction in place. After the Savings & Loan crisis, the 1989 Congress passed the Financial Institutions Reform, Recovery and Enforcement Act (FIREA) which did away with the FHLBB with Freddie Mac’s board becoming shareholder controlled.


pages: 2,045 words: 566,714

J.K. Lasser's Your Income Tax by J K Lasser Institute

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Affordable Care Act / Obamacare, airline deregulation, asset allocation, collective bargaining, distributed generation, employer provided health coverage, estate planning, Home mortgage interest deduction, intangible asset, medical malpractice, medical residency, money market fund, mortgage debt, mortgage tax deduction, passive income, Ponzi scheme, profit motive, rent control, Right to Buy, telemarketer, transaction costs, urban renewal, zero-coupon bond

However, if you rent out a second home that qualifies as a second residence, the portion of mortgage interest allocable to rental use is deductible as qualified mortgage interest and is not treated as a passive activity expense. 15.1 Home Mortgage Interest 15.2 Home Acquisition Loans 15.3 Home Equity Loans 15.4 Home Construction Loans 15.5 Home Improvement Loans 15.6 Mortgage Insurance Premiums and Other Payment Rules 15.7 Interest on Refinanced Loans 15.8 “Points” 15.9 Cooperative and Condominium Apartments 15.10 Investment Interest Limitations 15.11 Debts To Carry Tax-Exempt Obligations 15.12 Earmarking Use of Loan Proceeds For Investment or Business 15.13 Year To Claim an Interest Deduction 15.14 Prepaid Interest 15.1 Home Mortgage Interest You generally may deduct on Schedule A (Form 1040) qualifying mortgage interest on up to two residences (see two-residence limit, below).

If your personal use of a residence exceeds the 14-day/10% test (9.7), the residence was rented for at least 15 days during the year, and the allocable rental expenses (including depreciation) exceed rental income, you cannot deduct the net loss from other income. Some of the expenses will not be currently deductible. The allocable rental expenses are deducted from rental income in a specific order: Step 1. The rental portion of the following expenses is fully deductible on Schedule E of Form 1040, even if the total exceeds rental income: deductible home mortgage interest (15.1), real estate taxes (16.4), deductible casualty and theft losses (Chapter 18), and directly related rental expenses. Directly related rental expenses are rental expenses not related to the use or maintenance of the residence itself, such as office supplies, rental agency fees, advertising, and depreciation on office equipment used in the rental activity. Step 2. If there is any rental income remaining after the income is reduced by the expenses in Step 1, the balance is next offset by the rental portion of operating expenses for the residence itself, such as utilities, repairs, and insurance.

- - - - - - - - - - Planning Reminder Rental of Personal Residence Renting a personal residence is not treated as a passive rental activity if you personally use the home for more than the greater of (1) 14 days or (2) 10% of the days the home is rented for a fair market rental amount (9.7). On Schedule E, you may claim a full deduction for the rental portion of real estate taxes and mortgage interest, assuming the home is a principal residence or qualifying second home under the mortgage interest rules (15.1). See 9.9 for limitations on deductions of other rental expenses. - - - - - - - - - - 10.2 Rental Real Estate Loss Allowance of up to $25,000 If you are not a real estate professional (10.3) but you actively participate by performing some management role in a real estate rental venture, you may deduct up to $25,000 of a real estate rental loss against your regular, nonpassive income such as wages.


pages: 265 words: 74,941

The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work by Richard Florida

banking crisis, big-box store, blue-collar work, car-free, carbon footprint, collapse of Lehman Brothers, congestion charging, creative destruction, deskilling, edge city, Edward Glaeser, falling living standards, financial innovation, Ford paid five dollars a day, high net worth, Home mortgage interest deduction, housing crisis, if you build it, they will come, income inequality, indoor plumbing, interchangeable parts, invention of the telephone, Jane Jacobs, Joseph Schumpeter, knowledge economy, labour mobility, low skilled workers, manufacturing employment, McMansion, Menlo Park, Nate Silver, New Economic Geography, new economy, New Urbanism, oil shock, Own Your Own Home, pattern recognition, peak oil, Ponzi scheme, post-industrial society, postindustrial economy, reserve currency, Richard Florida, Robert Shiller, Robert Shiller, secular stagnation, Silicon Valley, Silicon Valley startup, sovereign wealth fund, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, total factor productivity, urban decay, urban planning, urban renewal, white flight, young professional, Zipcar

“The Great Depression provided an opportunity to rethink old policies in a major way,” he writes. “In the current morass, everything should, once again, be open for debate. One sacred cow that has long been in need of a good stockyard is the home mortgage interest deduction.”18 The deduction promotes inefficient use of scarce economic resources. On top of that, the bulk of the benefits go to fairly rich households, “people who are overwhelmingly in single-family detached houses,” notes Glaeser, who “would be likely to own that house with or without the home mortgage interest rate deduction.” He’s describing me, for instance; I own a single-family home in Canada, where no such deduction exists. He suggests “gradually reducing the upper limit” on the deduction to loans of up to $300,000. But it should not stop there; the current Reset provides the opportunity to rethink and restructure the housing system more broadly.


pages: 296 words: 76,284

The End of the Suburbs: Where the American Dream Is Moving by Leigh Gallagher

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Airbnb, big-box store, Burning Man, call centre, car-free, Celebration, Florida, clean water, collaborative consumption, Columbine, commoditize, crack epidemic, East Village, edge city, Edward Glaeser, extreme commuting, helicopter parent, Home mortgage interest deduction, housing crisis, Jane Jacobs, low skilled workers, Mark Zuckerberg, McMansion, Menlo Park, mortgage tax deduction, negative equity, New Urbanism, peak oil, Ponzi scheme, Richard Florida, Robert Shiller, Robert Shiller, Sand Hill Road, Seaside, Florida, Silicon Valley, Steve Jobs, Stewart Brand, the built environment, The Death and Life of Great American Cities, Tony Hsieh, transit-oriented development, upwardly mobile, urban planning, urban sprawl, Victor Gruen, walkable city, white flight, white picket fence, young professional, Zipcar

Before the Depression, mortgages were short-term and so expensive, covering only a small percentage of the home purchase price, that only the wealthy could afford paying so much up front for the cost of a home. But with the new government backing, private lenders were suddenly willing to lend on much more generous terms, extending the length of the loan to twenty and then thirty years and ultimately lending more than 90 percent of the cost of the home to buyers. The modern-day long-term fixed-rate mortgage was born, making it possible for almost anyone to get a home loan. The mortgage interest tax deduction, a by-product of the 1913 law that established the federal income tax—and still one of the biggest incentives for home ownership to this day—provided a welcome assist. Then in 1944, the government passed the Servicemen’s Readjustment Act, otherwise known as the GI Bill, which provided low-interest, zero-down-payment loans to millions of veterans. Combined, these moves were effectively like throwing a match on a pile of drywall.

” • • • For all the ideals of freedom our country was built on, our modern residential pattern of suburban development—and the notion that it provided a better way to live—was decidedly master-planned. It started with the federal policies that laid the groundwork for suburbia, the post-Depression inventions explored in the previous chapter that suddenly made home ownership affordable for the middle class. The mortgage interest tax deduction, which wasn’t even intended for mortgages but was an indirect product of the 1913 act that established the federal income tax, today provides nearly $400 billion in subsidies to home owners each year, propping up the market for single-family homes to the detriment of renters, who get no such help. The FHA put in place incentives that made it more lucrative for builders to invest in new construction than to improve existing houses—loans for repairs were smaller and shorter term than loans for new houses—as well as rules that eased the way for the construction of subdivisions.

It’s a charming sepia photo of a vibrant, densely packed Main Street chockablock with pedestrians and horse-drawn carriages. “I love this street,” he says. “This place totally rocks, doesn’t it?” He then shows a picture of Brainerd today, a strip mall surrounded by parking lots, to show the difference. The 1894 version, he implores the audience, is what we need to go back to. “We built this before the interstate highway act, before the home mortgage interest deduction . . . before zoning, before the thirty-year mortgage,” he says. “We built places that rocked back when we had to build them to be financially sound.” Marohn has not been immune from the pain of the housing crisis. His house, which he and his wife had built in 1995 and refinanced a few times, has lost value; it was assessed at $272,000 a few years ago and he thinks it would sell today for $200,000.


pages: 397 words: 112,034

What's Next?: Unconventional Wisdom on the Future of the World Economy by David Hale, Lyric Hughes Hale

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affirmative action, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Berlin Wall, Black Swan, Bretton Woods, capital controls, Cass Sunstein, central bank independence, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, debt deflation, declining real wages, deindustrialization, diversification, energy security, Erik Brynjolfsson, Fall of the Berlin Wall, financial innovation, floating exchange rates, full employment, Gini coefficient, global reserve currency, global village, high net worth, Home mortgage interest deduction, housing crisis, index fund, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Just-in-time delivery, Kenneth Rogoff, labour market flexibility, labour mobility, Long Term Capital Management, Mahatma Gandhi, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, money market fund, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Network effects, new economy, Nicholas Carr, oil shale / tar sands, oil shock, open economy, passive investing, payday loans, peak oil, Ponzi scheme, post-oil, price stability, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, risk/return, Robert Shiller, Robert Shiller, Ronald Reagan, sovereign wealth fund, special drawing rights, technology bubble, The Great Moderation, Thomas Kuhn: the structure of scientific revolutions, Tobin tax, too big to fail, total factor productivity, trade liberalization, Washington Consensus, Westphalian system, women in the workforce, yield curve

Virtually all mortgages in Canada are “full recourse” loans, whereby the borrower remains obligated to repay the full value of the mortgage even if the borrower’s home is foreclosed upon. Thus, unlike in many jurisdictions in the United States, where the borrower can simply “mail the key to the bank and walk away,” if, for example, the value of the property falls below the mortgage principal, Canadian borrowers can have other assets and even future earnings attached by the lender. Home mortgage interest is not tax deductable in Canada either (but capital gains on a home are also not subject to tax). Full recourse mortgages and no mortgage interest tax deductibility significantly reduce the incentive to take out excessively large mortgages. Indeed, there is an incentive to accelerate mortgage repayment. Unsurprisingly, a large proportion of mortgages in Canada are insured. Any mortgage with less than a 20 percent down payment must be fully insured for the life of the mortgage.

See also climate change Green Movement, 209–211 Greenwood, John, xxiv gross domestic product (GDP): country comparison, 30, 64; Latin America, 50–51; Mexico, 30, 36 H1N1 flu, 29 Hale, David, 3 Harper, Stephen, 13, 16 Hatoyama, Ichiro, 105 Hatoyama, Yukio, 103, 105 health care expenditures, 258, 260 herd instinct, 288–289 heuristics, 287, 289 Heyman, Timothy, xviii, xix, 29 Hezbollah, 212–213 Highly Indebted Poor Countries (HIPC), 121 HIH Insurance, 142 Hinton, Les, 300 home mortgage interest deduction, 17, 144 Hong Kong, 164 housing sector: Australia, 143–145; Canada, 19–20; US, 9 HST, 20 Hungary, 262 hydrocarbons, 181–183 income taxes, 6, 260–262 India, 204, 257 Indonesia, 7–8 industrial policy: Japan, 106–107; South Africa, 130–131 industrial production, country comparison, 65 infant industries, 106–107 inflation, 51, 82, 95, 166, 256 information: diminishing returns of, 292–301; freedom of, 295; processing of, 292–294; role of, xxix; selective consumption of, 295–297 infrastructure, 83, 131–132, 148 Institutional Revolutionary Party (PRI), xix, 29, 31, 35, 38, 43–45 interest rates, 166; Australia, 147; Canada, 22–23; gold prices and, 173 Intergovernmental Panel on Climate Change (IPCC), 219 international currency, 155–156 International Energy Agency (IEA), xxv international financial institutions (IFIs), 119, 121 International Monetary Fund (IMF), 119, 154, 162 Internet: impact of, xxix, 292–301; multilayer structure of, 295; perceptions of reality and, 298–300 investment banks, 239 Investment Canada Act, 26–27 investment decision-making, xxix, 285–291 Iran: 2009 election in, 205–209; civil society in, 208; economy of, 211–214, 217–218; Green Movement in, 209–211; military-industrial complex in, 212–213; modern, 204–206; political situation in, xxvi, 203–218; revolutions in, 206–208 Iranian citizens, 208–211 Iraq, oil production in, xxv, 186–189 Ireland, 166 Israel, 213, 217 Italy, 262 Japan: agricultural sector in, 110–112; current account surplus, 93; economic problems in, xxi, 92–101; economic reform in, 104; electoral changes in, 109–110; exchange rate policy, 98; export markets, 94, 95; fiscal deficits, 93, 98–100; fiscal policy, 98–100; government debt in, 160, 167; impact of financial crisis on, 92; industrial policy of, 106–107; labor rigidity in, 112–114; monetary policy of, 9, 96–98, 101; policy response in, 95–96; politics in, xxi–xxii, 102–114; productivity losses in, xvi; reforms needed in, 110–114; savings rate in, 88, 92–93; US demand and, 93–94 Japan Agriculture (JA), 110–111 Japan Air Lines (JAL), 113–114 Jefferis, Keith, xxii job losses, xvi Joint Oil Data Initiative (JODI), 183 Jones, Lupita, 35 Journalism Online, 301 Kahneman, Daniel, 289 Kaletsky, Anatole, xx, 57, 78, 82 Kan, Naoto, xxi, 97, 103, 105 Katz, Richard, xxi, 102 Kedrosky, Paul, 295 Kenya, xxii, 119, 126 Keynesian economics, 68–69 Kishi, Nobusuke, 105 Koizumi, Junichiro, 103, 108–109 Kosmos, 184–185 Krugman, Paul, 299 Kuczynski, Pedro Pablo, xix, 48 Kuhn, Thomas, 204–205 Kuwait, 184 Kyoto Protocol, xxvi, 222–224 labor costs, 69, 74, 85–87, 89–90 labor market: Canadian, 17–18; Japan, 112–114 Latin America, xv, 48–54; commodity boom and, 52–54; demographics, xx, 51; diversity of, 48–49; economic growth in, 51, 53, 257; financial crisis in, xix–xx; impact of financial crisis on, 50–51; reforms, 49–52, 53–54.


pages: 204 words: 67,922

Elsewhere, U.S.A: How We Got From the Company Man, Family Dinners, and the Affluent Society to the Home Office, BlackBerry Moms,and Economic Anxiety by Dalton Conley

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3D printing, assortative mating, call centre, clean water, commoditize, dematerialisation, demographic transition, Edward Glaeser, extreme commuting, feminist movement, financial independence, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, Home mortgage interest deduction, income inequality, informal economy, Jane Jacobs, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labor-force participation, late capitalism, low skilled workers, manufacturing employment, mass immigration, McMansion, mortgage tax deduction, new economy, off grid, oil shock, PageRank, Ponzi scheme, positional goods, post-industrial society, Post-materialism, post-materialism, principal–agent problem, recommendation engine, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Skype, statistical model, The Death and Life of Great American Cities, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, women in the workforce, Yom Kippur War

What’s more, it is the family home, more than the stock market, that keeps our inequality Ponzi scheme going and that drives government policy and private choices. The median size of new homes has increased to 2,500 square feet today, up by almost 50 percent since 1976. Likewise, the proportion of new homes with four or more bedrooms has doubled and the number with three or more bathrooms has tripled in just the last twenty years. These figures, and the debt burden that drives them, make the home mortgage interest deduction the most sacrosanct federal policy after social security17 As a result, cheap and easy credit has been a major reason why the United States recently dipped into negative savings for the first time since the Great Depression.18And though manufacturing of machinery and other durable goods has pretty much flown the coop (that’s the coop, not the co-op), new homes and renovations are about the only thing left that we actually physically construct ourselves.


pages: 261 words: 78,884

$2.00 A Day: Living on Almost Nothing in America by Kathryn Edin, H. Luke Shaefer

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Affordable Care Act / Obamacare, clean water, ending welfare as we know it, future of work, Home mortgage interest deduction, housing crisis, impulse control, indoor plumbing, informal economy, low-wage service sector, mass incarceration, race to the bottom, randomized controlled trial, Ronald Reagan, The Future of Employment, War on Poverty, working poor, Works Progress Administration

There’s actually already an underutilized mechanism in place at the federal level that could help with this—the National Housing Trust Fund. The NHTF is supposed to act as a pot of money that could be tapped by states to help support the building of affordable housing developments. Yet the recent housing crisis derailed efforts to fully fund the NHTF, and the federal government has yet to build the program up. One idea to fund such an initiative is to limit the home mortgage interest deduction on mortgage values above a certain level, perhaps half a million or a million dollars, in effect shifting a subsidy away from very wealthy families to some of the very poorest ones. Another possible avenue to increase the stock of affordable housing and decrease residential segregation is to reduce the prevalence of discriminatory “exclusionary zoning” regulations. Through such provisions, municipal (often suburban) governments restrict what kind of housing can be built in a community—such as by prohibiting apartment buildings or setting large minimum lot sizes—so as to limit the supply of housing available to low-income families.


pages: 249 words: 66,383

House of Debt: How They (And You) Caused the Great Recession, and How We Can Prevent It From Happening Again by Atif Mian, Amir Sufi

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Andrei Shleifer, asset-backed security, balance sheet recession, bank run, banking crisis, Ben Bernanke: helicopter money, break the buck, Carmen Reinhart, collapse of Lehman Brothers, creative destruction, debt deflation, Edward Glaeser, en.wikipedia.org, financial innovation, full employment, high net worth, Home mortgage interest deduction, housing crisis, Joseph Schumpeter, Kenneth Rogoff, liquidity trap, Long Term Capital Management, market bubble, Martin Wolf, money market fund, moral hazard, mortgage debt, negative equity, paradox of thrift, quantitative easing, Robert Shiller, Robert Shiller, school choice, shareholder value, the payments system, the scientific method, tulip mania, young professional, zero-sum game

But, as David Miles shows through a series of calculations, the Great Recession in the United Kingdom would have been far less severe had they been in place. The program has proved immensely popular with very high volume of equity loan issuance, which shows how government choices dictate what financial contracts prevail in the marketplace.18 Tax policy is another factor that limits innovation in the mortgage industry. The home-owner mortgage-interest deduction encourages home owners to borrow using traditional mortgage contracts. The SRM contract—because of its risk-sharing qualities—would likely not qualify as a “debt instrument” and would therefore not have the same preferential tax treatment as standard mortgages. In fact, the IRS only gives the deduction if the party obtaining the financing—a home owner or shareholders of a corporation—is “subordinate to the rights of general creditors.”19 To get the tax advantage, a home owner must bear the first losses when house prices fall.


pages: 430 words: 109,064

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown by Simon Johnson, James Kwak

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Andrei Shleifer, Asian financial crisis, asset-backed security, bank run, banking crisis, Bernie Madoff, Bonfire of the Vanities, bonus culture, break the buck, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, commoditize, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Edward Glaeser, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, financial intermediation, financial repression, fixed income, George Akerlof, Gordon Gekko, greed is good, Home mortgage interest deduction, Hyman Minsky, income per capita, information asymmetry, interest rate derivative, interest rate swap, Kenneth Rogoff, laissez-faire capitalism, late fees, light touch regulation, Long Term Capital Management, market bubble, market fundamentalism, Martin Wolf, money market fund, moral hazard, mortgage tax deduction, Myron Scholes, Paul Samuelson, Ponzi scheme, price stability, profit maximization, race to the bottom, regulatory arbitrage, rent-seeking, Robert Bork, Robert Shiller, Robert Shiller, Ronald Reagan, Saturday Night Live, Satyajit Das, sovereign wealth fund, The Myth of the Rational Market, too big to fail, transaction costs, value at risk, yield curve

Quoted in Eric Lipton and Raymond Hernandez, “A Champion of Wall Street Reaps Benefits,” The New York Times, December 13, 2008, available at http://www.nytimes.com/2008/12/14/business/14schumer.html. 58. U.S. Census Bureau, Housing Vacancies and Homeownership, Table 14, available at http://www.census.gov/hhes/www/housing/hvs/historic/index.html. 59. Edward L. Glaeser and Jesse M. Shapiro, “The Benefits of the Home Mortgage Interest Deduction,” Tax Policy and the Economy 17 (2003): 37–82, available at http://www.jstor.org/stable/20140504. 60. Edward L. Glaeser, “Attack of the Home Buyers’ Tax Credit,” Economix Blog, The New York Times, November 10, 2009, available at http://economix.blogs.nytimes.com/2009/11/10/attack-of-the-home-buyers-tax-credit/. The paper he cites is Denise DiPasquale and Edward L. Glaeser, “Incentives and Social Capital: Are Homeowners Better Citizens?”


pages: 363 words: 92,422

A Fine Mess by T. R. Reid

Affordable Care Act / Obamacare, Bernie Sanders, Capital in the Twenty-First Century by Thomas Piketty, carried interest, centre right, clean water, Donald Trump, Double Irish / Dutch Sandwich, game design, Gini coefficient, High speed trading, Home mortgage interest deduction, Honoré de Balzac, income inequality, industrial robot, land value tax, loss aversion, mortgage tax deduction, obamacare, Occupy movement, offshore financial centre, oil shock, Plutocrats, plutocrats, race to the bottom, Ronald Reagan, seigniorage, Silicon Valley, Skype, Snapchat, sovereign wealth fund, Tesla Model S, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, We are the 99%, WikiLeaks

That is, this one tax deduction costs more than the budgets of the departments of Agriculture, Commerce, Energy, the Interior, and the Treasury combined. Like other deductions, it is a particular boon to those in the upper brackets; about three-quarters of all the deductions for home mortgage interest go to taxpayers making more than $100,000 per year. About half of American homeowners take the standard deduction, which means they get no tax break for paying their mortgage. While this deduction is promoted by realtors and mortgage bankers as a boon to home buyers, it is just as likely to make a home purchase more difficult. All studies (except those funded by the real estate industry) find that a mortgage interest deduction raises the price of a house. When the OECD investigated the impact of the mortgage interest deduction in wealthy countries where it is still in place, it concluded that “new purchasers . . . are not necessarily the beneficiaries of these tax provisions,” because the interest deduction forces them to pay an increased price.

Some have made the preference for mortgage interest a credit rather than a deduction, which means everybody gets the same tax break. But Australia, Canada, Germany, Great Britain, Israel, Japan, the Netherlands, and New Zealand, for example, have no deduction for mortgage interest at all. Yet eliminating the deduction seems to have no impact on home ownership. In all the industrialized democracies, the rate of home ownership is just about the same. Roughly 65% of families own their home in countries that have the mortgage interest deduction, and about 65% of families own their home in countries that do not. Just like the charitable deduction, though, the write-off for mortgage interest is hard to get rid of. It has been part of the tax code for so long (more than a hundred years) that people see it as a basic right. Beyond that, eliminating the deduction would probably reduce the price a buyer will pay—at least in the short run—and reducing the price of houses would depress the value of what is most Americans’ largest investment.

Gregory gross domestic product (GDP), 14, 23–24, 33, 104, 108, 117, 126, 186 gross receipts tax, 228, 247 Group of Twenty, 182 Guth, Petr, 109 Hall, Robert, 96–97 Hand, Learned, 159–61 Hanseatic League, 102 Hatch, Orrin, 77–78 Hayek, F. A., 44–45 health care, 17, 37–38, 44, 51, 63, 69, 114, 118, 157, 176–80, 186, 221 health insurance, 29, 36, 52–53, 63, 81, 126, 133, 209, 218, 246–47, 251 hedge funds, 137–38, 183 Helvering v. Gregory, 159–61 Hines, James R., 56–57 Hollande, François, 127, 133–34, 142, 151 Holmes, Oliver Wendell, Jr., 30, 32, 36 home ownership, 8–9, 36, 40, 52, 75–81, 87–91, 116, 122. See also mortgage interest deduction; property: taxes Hoover Institution, 96–97 Hungary, 15, 18–19, 41, 111, 239 Iceland, 15, 129, 200 Illinois, 141–44, 157, 163 immigrants, 155, 192, 194–95, 229 imports, 34, 50, 65, 187, 189, 193 income definition of, 17–18, 52, 222, 255 distribution of, 44–46, 57 foreign-earned, 22–23, 81, 143–58, 161–64 inequality of, 43–46, 115–25, 135, 139 “ordinary,” 137, 160 seven brackets of, 97 “stateless,” 150, 154 income tax earned income tax credit, 217 elimination of, 225 history of, 1–3, 12, 34–35, 45–46, 121, 135, 145, 173, 250 nonpayers of, 233–34 rebates of, 41–42 See also specific types Income Tax, The: A Study of the History, Theory, and Practice of Income Taxation at Home and Abroad (Seligman), 45 India, 34, 129 inequality, economic, 8, 43–46, 98, 107, 115–25, 127, 135, 139, 172–75, 242, 253–56 inflation, 32–33 inheritance tax, 17, 30, 99, 121, 129–33, 254 insurance, 31–32, 60–61, 181–82.


pages: 543 words: 157,991

All the Devils Are Here by Bethany McLean

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Asian financial crisis, asset-backed security, bank run, Black-Scholes formula, break the buck, call centre, collateralized debt obligation, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Exxon Valdez, fear of failure, financial innovation, fixed income, high net worth, Home mortgage interest deduction, interest rate swap, laissez-faire capitalism, Long Term Capital Management, margin call, market bubble, market fundamentalism, Maui Hawaii, money market fund, moral hazard, mortgage debt, Northern Rock, Own Your Own Home, Ponzi scheme, quantitative trading / quantitative finance, race to the bottom, risk/return, Ronald Reagan, Rosa Parks, shareholder value, short selling, South Sea Bubble, statistical model, telemarketer, too big to fail, value at risk, zero-sum game

In a way that isn’t true in most other countries, homeownership is something that the vast majority of Americans aspire to. It suggests upward mobility, opportunity, a stake in something that matters. Historically, owning a home hasn’t just been about taking possession of an appreciating asset, or even having a roof over one’s head. It has also been a statement about values. Not surprisingly, government policy has long encouraged homeownership. The home mortgage interest deduction is a classic example. So is the thirty-year fixed mortgage, which is standard in only one other country (Denmark) and is designed to allow middle-class families to afford monthly mortgage payments. For decades, federal law gave the S&L industry a small interest rate advantage over the banking industry—the housing differential, this advantage was called. All of these policies had unswerving bipartisan support.


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Happy City: Transforming Our Lives Through Urban Design by Charles Montgomery

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, agricultural Revolution, American Society of Civil Engineers: Report Card, Bernie Madoff, British Empire, Buckminster Fuller, car-free, carbon footprint, centre right, City Beautiful movement, clean water, congestion charging, correlation does not imply causation, East Village, edge city, energy security, Enrique Peñalosa, experimental subject, Frank Gehry, Google Earth, happiness index / gross national happiness, Home mortgage interest deduction, housing crisis, income inequality, income per capita, Induced demand, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, license plate recognition, McMansion, means of production, megacity, Menlo Park, meta analysis, meta-analysis, mortgage tax deduction, New Urbanism, peak oil, Ponzi scheme, rent control, ride hailing / ride sharing, risk tolerance, science of happiness, Seaside, Florida, Silicon Valley, the built environment, The Death and Life of Great American Cities, the High Line, The Spirit Level, The Wealth of Nations by Adam Smith, trade route, transit-oriented development, upwardly mobile, urban planning, urban sprawl, wage slave, white flight, World Values Survey, zero-sum game, Zipcar

Then there is the U.S. government’s accelerated depreciation tax deduction, which gives developers a generous tax break for creating new buildings rather than renovating or reusing old ones. It effectively rewards Walmart for abandoning older stores and building in regional power centers far from the communities they first promised to serve. Another misguided gift to sprawl is the home mortgage interest tax deduction. The United States is one of only a handful of countries in the world that gives individuals a tax break on interest for home mortgages. In practice, the deduction has given the biggest tax break to people who can afford to buy new homes on the suburban fringe rather than those who buy cheaper, modest homes in older neighborhoods. (Personal loans for renovations, for example, don’t get the deduction.)


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Financial Independence by John J. Vento

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Affordable Care Act / Obamacare, Albert Einstein, asset allocation, diversification, diversified portfolio, estate planning, financial independence, fixed income, high net worth, Home mortgage interest deduction, money market fund, mortgage debt, mortgage tax deduction, oil shock, Own Your Own Home, passive income, risk tolerance, the rule of 72, time value of money, transaction costs, young professional, zero day

A house should meet your basic living standards (needs), and should not be based on your ego (wants). Still, a house can increase in value if you hang on to it for many years and maintain it well. It can also help you financially in other ways. Why a Mortgage Is Still Good Debt The reason a home mortgage is usually considered good debt is that from the moment you buy the house, it offers certain financial reliefs and leverage. For starters, your home mortgage interest may be tax deductible. (The federal government allows you to deduct mortgage interest expenses to the extent your mortgage does not exceed $1 million. Therefore, if you are in the 40 percent tax bracket and you are paying 6 percent interest on your mortgage, your after-tax cost for financing may actually be only 3.6 percent, which is 6 percent less the 40 percent tax savings). Real estate taxes are also tax deductible.


pages: 500 words: 145,005

Misbehaving: The Making of Behavioral Economics by Richard H. Thaler

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3Com Palm IPO, Albert Einstein, Alvin Roth, Amazon Mechanical Turk, Andrei Shleifer, Apple's 1984 Super Bowl advert, Atul Gawande, Berlin Wall, Bernie Madoff, Black-Scholes formula, capital asset pricing model, Cass Sunstein, Checklist Manifesto, choice architecture, clean water, cognitive dissonance, conceptual framework, constrained optimization, Daniel Kahneman / Amos Tversky, delayed gratification, diversification, diversified portfolio, Edward Glaeser, endowment effect, equity premium, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, George Akerlof, hindsight bias, Home mortgage interest deduction, impulse control, index fund, information asymmetry, invisible hand, Jean Tirole, John Nash: game theory, John von Neumann, Kenneth Arrow, late fees, law of one price, libertarian paternalism, Long Term Capital Management, loss aversion, market clearing, Mason jar, mental accounting, meta analysis, meta-analysis, money market fund, More Guns, Less Crime, mortgage debt, Myron Scholes, Nash equilibrium, Nate Silver, New Journalism, nudge unit, Paul Samuelson, payday loans, Ponzi scheme, presumed consent, pre–internet, principal–agent problem, prisoner's dilemma, profit maximization, random walk, randomized controlled trial, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Silicon Valley, South Sea Bubble, statistical model, Steve Jobs, technology bubble, The Chicago School, The Myth of the Rational Market, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, ultimatum game, Vilfredo Pareto, Walter Mischel, zero-sum game

In fact, in my parents’ generation, families strived to pay off their mortgages as quickly as possible, and as late as the early 1980s, people over sixty had little or no mortgage debt. In time this attitude began to shift in the United States, partly as an unintended side effect of a Reagan-era tax reform. Before this change, all interest paid, including the interest on automobile loans and credit cards, was tax deductible; after 1986 only home mortgage interest qualified for a deduction. This created an economic incentive for banks to create home equity lines of credit that households could use to borrow money in a tax-deductible way. And certainly it made sense to use a home equity loan to finance the purchase of a car rather than a car loan, because the interest was often lower as well as being tax deductible. But the change eroded the social norm that home equity was sacrosanct.


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Broken Markets: A User's Guide to the Post-Finance Economy by Kevin Mellyn

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banking crisis, banks create money, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, call centre, Carmen Reinhart, central bank independence, centre right, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, crony capitalism, currency manipulation / currency intervention, disintermediation, eurozone crisis, fiat currency, financial innovation, financial repression, floating exchange rates, Fractional reserve banking, global reserve currency, global supply chain, Home mortgage interest deduction, index fund, information asymmetry, joint-stock company, Joseph Schumpeter, labor-force participation, labour market flexibility, light touch regulation, liquidity trap, London Interbank Offered Rate, lump of labour, market bubble, market clearing, Martin Wolf, means of production, mobile money, money market fund, moral hazard, mortgage debt, mortgage tax deduction, negative equity, Ponzi scheme, profit motive, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, rising living standards, Ronald Coase, seigniorage, shareholder value, Silicon Valley, statistical model, Steve Jobs, The Great Moderation, the payments system, Tobin tax, too big to fail, transaction costs, underbanked, Works Progress Administration, yield curve, Yogi Berra, zero-sum game


pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

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3D printing, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, bonus culture, Bretton Woods, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial intermediation, Frederick Winslow Taylor, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, knowledge economy, labor-force participation, labour mobility, London Whale, Long Term Capital Management, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, Satyajit Das, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, sovereign wealth fund, Steve Jobs, technology bubble, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, zero-sum game


pages: 246 words: 74,341

Financial Fiasco: How America's Infatuation With Homeownership and Easy Money Created the Economic Crisis by Johan Norberg

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accounting loophole / creative accounting, bank run, banking crisis, Bernie Madoff, Black Swan, capital controls, central bank independence, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Brooks, diversification, financial deregulation, financial innovation, helicopter parent, Home mortgage interest deduction, housing crisis, Howard Zinn, Hyman Minsky, Isaac Newton, Joseph Schumpeter, Long Term Capital Management, market bubble, Martin Wolf, Mexican peso crisis / tequila crisis, millennium bug, money market fund, moral hazard, mortgage tax deduction, Naomi Klein, new economy, Northern Rock, Own Your Own Home, price stability, Ronald Reagan, savings glut, short selling, Silicon Valley, South Sea Bubble, The Wealth of Nations by Adam Smith, too big to fail

For this reason, ever since the United States introduced an income tax its government has been helping out its citizens by allowing them to deduct mortgageinterest payments from that tax-similarly to some other countries, including Sweden. This support for homeownership was reinforced by President Ronald Reagan and Congress in 1986, when the tax deduction for home mortgage interest was retained, while tax incentives favoring rental development and ownership were removed. In addition, the deduction for other consumer loans, such as car and credit card loans, was abolished, which had the effect of steering more and more lending toward the housing market. In 1994, 68 percent of home loans were in fact used to pay down debts for other consumption, for example, car purchases.' Some people therefore see the mortgage deduction as an annual $80 billion subsidy for the house as an investment object.


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Aftershock: The Next Economy and America's Future by Robert B. Reich

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Berlin Wall, declining real wages, delayed gratification, Doha Development Round, endowment effect, full employment, George Akerlof, Home mortgage interest deduction, Hyman Minsky, illegal immigration, income inequality, invisible hand, job automation, labor-force participation, Long Term Capital Management, loss aversion, mortgage debt, new economy, offshore financial centre, Ralph Nader, Ronald Reagan, school vouchers, sovereign wealth fund, Thorstein Veblen, too big to fail, World Values Survey

In 1965 came health insurance for the elderly and the poor (Medicare and Medicaid). Poverty among the elderly dropped by half. Economic security proved the handmaiden of prosperity. In requiring Americans to share the costs of adversity, it enabled them to share the benefits of peace of mind. Peace of mind and security freed them to consume more of the fruits of their labors. The government sponsored the dreams of American families to own their own home by providing low-cost mortgages and interest deductions on mortgage payments. In many sections of the country, government subsidized electricity and water to make such homes affordable. And it built the roads and freeways that connected the homes with major commercial centers. The interstate highway system—forty-one thousand miles of straight four-lane (sometimes even six-lane) freeways to replace the old two-lane federal roads that meandered through cities and towns—became the single most ambitious public works program in American history.


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Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One by Meghnad Desai

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3D printing, bank run, banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, correlation coefficient, correlation does not imply causation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, German hyperinflation, Gunnar Myrdal, Home mortgage interest deduction, imperial preference, income inequality, inflation targeting, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, market bubble, market clearing, means of production, Mexican peso crisis / tequila crisis, mortgage debt, Myron Scholes, negative equity, Northern Rock, oil shale / tar sands, oil shock, open economy, Paul Samuelson, price stability, purchasing power parity, pushing on a string, quantitative easing, reserve currency, rising living standards, risk/return, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, seigniorage, Silicon Valley, Simon Kuznets, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, women in the workforce


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Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy by Francis Fukuyama

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Affordable Care Act / Obamacare, Andrei Shleifer, Asian financial crisis, Atahualpa, banking crisis, barriers to entry, Berlin Wall, blood diamonds, British Empire, centre right, clean water, collapse of Lehman Brothers, colonial rule, conceptual framework, crony capitalism, deindustrialization, Deng Xiaoping, double entry bookkeeping, Edward Snowden, Erik Brynjolfsson, European colonialism, facts on the ground, failed state, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gini coefficient, Hernando de Soto, Home mortgage interest deduction, income inequality, information asymmetry, invention of the printing press, iterative process, knowledge worker, land reform, land tenure, life extension, low skilled workers, manufacturing employment, means of production, Menlo Park, Mohammed Bouazizi, Monroe Doctrine, moral hazard, new economy, open economy, out of africa, Peace of Westphalia, Port of Oakland, post-industrial society, Post-materialism, post-materialism, price discrimination, quantitative easing, RAND corporation, rent-seeking, road to serfdom, Ronald Reagan, Scientific racism, Scramble for Africa, Second Machine Age, Silicon Valley, special economic zone, stem cell, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, too big to fail, trade route, transaction costs, Tyler Cowen: Great Stagnation, Vilfredo Pareto, women in the workforce, World Values Survey, zero-sum game


pages: 590 words: 153,208

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The Ascent of Money: A Financial History of the World by Niall Ferguson

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Admiral Zheng, Andrei Shleifer, Asian financial crisis, asset allocation, asset-backed security, Atahualpa, bank run, banking crisis, banks create money, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, BRICs, British Empire, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collateralized debt obligation, colonial exploitation, commoditize, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, deglobalization, diversification, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Glaeser, Edward Lloyd's coffeehouse, financial innovation, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, Francisco Pizarro, full employment, German hyperinflation, Hernando de Soto, high net worth, hindsight bias, Home mortgage interest deduction, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, iterative process, John Meriwether, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour mobility, Landlord’s Game, liberal capitalism, London Interbank Offered Rate, Long Term Capital Management, market bubble, market fundamentalism, means of production, Mikhail Gorbachev, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, Naomi Klein, negative equity, Nick Leeson, Northern Rock, Parag Khanna, pension reform, price anchoring, price stability, principal–agent problem, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, quantitative hedge fund, RAND corporation, random walk, rent control, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, seigniorage, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spice trade, structural adjustment programs, technology bubble, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Bayes, Thomas Malthus, Thorstein Veblen, too big to fail, transaction costs, value at risk, Washington Consensus, Yom Kippur War

The only real difference between Right and Left was the readiness of the Conservatives to deregulate the private rental market, in the hope of encouraging private landlords, and the equal and opposite resolve of Labour to reimpose rent controls and stamp out ‘Rachmanism’ (exploitative behaviour by landlords), exemplified by Peter Rachman, who used intimidation to evict the sitting tenants of rent-controlled properties, replacing them with West Indian immigrants who had to pay market rents.31 As late as 1971, fewer than half of British homes were owner-occupied. In the United States, where public housing was never so important, mortgage interest payments were always tax deductible, from the inception of the federal income tax in 1913.32 As Ronald Reagan said when the rationality of this tax break was challenged, mortgage interest relief was ‘part of the American dream’.ao It played a much smaller role in Britain until 1983, when a more radically Conservative government led by Margaret Thatcher introduced Mortgage Interest Relief At Source (MIRAS) for the first £30,000 of a qualifying mortgage.


pages: 552 words: 168,518

MacroWikinomics: Rebooting Business and the World by Don Tapscott, Anthony D. Williams

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accounting loophole / creative accounting, airport security, Andrew Keen, augmented reality, Ayatollah Khomeini, barriers to entry, bioinformatics, Bretton Woods, business climate, business process, car-free, carbon footprint, citizen journalism, Clayton Christensen, clean water, Climategate, Climatic Research Unit, cloud computing, collaborative editing, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, commoditize, corporate governance, corporate social responsibility, creative destruction, crowdsourcing, death of newspapers, demographic transition, distributed generation, don't be evil, en.wikipedia.org, energy security, energy transition, Exxon Valdez, failed state, fault tolerance, financial innovation, Galaxy Zoo, game design, global village, Google Earth, Hans Rosling, hive mind, Home mortgage interest deduction, interchangeable parts, Internet of things, invention of movable type, Isaac Newton, James Watt: steam engine, Jaron Lanier, jimmy wales, Joseph Schumpeter, Julian Assange, Kevin Kelly, knowledge economy, knowledge worker, Marc Andreessen, Marshall McLuhan, mass immigration, medical bankruptcy, megacity, mortgage tax deduction, Netflix Prize, new economy, Nicholas Carr, oil shock, old-boy network, online collectivism, open borders, open economy, pattern recognition, peer-to-peer lending, personalized medicine, Ray Kurzweil, RFID, ride hailing / ride sharing, Ronald Reagan, Rubik’s Cube, scientific mainstream, shareholder value, Silicon Valley, Skype, smart grid, smart meter, social graph, social web, software patent, Steve Jobs, text mining, the scientific method, The Wisdom of Crowds, transaction costs, transfer pricing, University of East Anglia, urban sprawl, value at risk, WikiLeaks, X Prize, young professional, Zipcar