The program I'm on seems to have a very clear theme: government has gotten out of everyone's control. As one example, it has become so musclebound because of its huge network of subsidies and preferential laws, and the growing mass of lobbyist groups that have arisen to defend them, that it can get nothing done. That's the basic premise of Jonathan Rauch's book "Government's End: Why Washington Stopped Working." He takes great pains to avoid demonizing the lobbyists; after all, they are only acting rationally, given the high costs for a single group not to lobby Washington when everyone else is. If you don't get in on the action, you're left screwed.
The major problem is that lots of people say they want small government, but nobody wants to personally suffer from government's retrenchment. So every time a particular program or subsidy goes under the ax, hordes of concerned citizens shriek like the Furies and send lobbyists to save "their" piece of the pie. This is absurd, of course. We need to realize that if we want to clear away the deadwood of government, and free up the small businessman from the morass of laws that favor the big boys, we will need to suffer some pain first.
I think one good place to start would be in housing.
Everyone is worrying about a "bubble" in housing. People are overstretching their means, and buying houses they clearly cannot afford, using such risky and shortsighted methods as interest-only adjustable loans. Why, you ask, would so many people put themselves at such risk of going upside-down on their mortgage?
Simple. Because paying interest on mortgages is government-subsidized. To wit, you get to write it off on your taxes.
How many times have you heard that buying a bigger house is the best tax-shelter available (assuming you aren't extremely wealthy)? How many people do you know who have actually bought massive houses for just that reason?
This cannot go on. If sanity is not restored to the housing industry soon, we are going to end up with a meltdown that will make the S&L crisis look like small fry. We have to remove the tax-free status of interest payments. It can be done in increments, naturally, to make it easier to adjust to, but it must be done.
"But," you ask, "how can we possibly do that? Think of how much money we will be paying. We can't afford that!" So along with making interest payments taxable, we should lower the tax rate to compensate. No more subsidizing interest-only foolishness; just fair taxes across the board. (Plus, it would be "progresssive"! After all, most poor people do not make mortgage payments.)
Best of all, by doing this we will demonstrate our fundamental willingness to accept a little pain in the short term in order to correct a fundamental distortion for the long term. That is, if we are indeed willing to do so. Philosohpically, ending mortgage subsidies should be something liberals and conservatives can agree needs to happen; the only thing standing in the way is our questionble tolerance for pain. That is why we need to start spreading the word now, to get the idea out into the open.
We need to face the facts. The only way to really fix government is to suck it up and do without many of the entitlements we have ourselves demanded, and benefit from. Housing subsidies is as good a place as any to start.