The New York Times has an article by Edward L. Glaeser titled: Killing (or Maiming) a Sacred Cow: Home Mortgage Deductions. This is an excellent read. The point of this article is that the home mortgage deduction is a government subsidy where the effect is that: "Subsidizing interest payments encourages people to leverage themselves to the hilt to bet on housing markets." On a broader scale, all subsidy programs (whether it be for college, oil exploration, or green vehicles) encourages unecomic investments and creates inflation. In the end subsidies do more harm than good.