Margaret Thatcher had many wonderful, short and powerful quips including the oft-said: “Socialism works … until the money runs out.”
The Soviet Union and the whole of Eastern Europe disintegrated precisely as the money ran out. The promised pensions never materialized, with many elderly needing to scrape-by from selling their personal belongings in the street. Many Western European countries today are also realizing that money is close to being tapped out as evidenced by rising budget deficits and debt to unsustainable levels. Government borrowing costs are quite high already in countries like Greece, Cyprus, Italy, Portugal, and Spain.
Were there any quotes related to the housing industry? Yes, indeed. When her Exchequer (an equivalent of U.S. Secretary of Treasury) suggested shaving or getting rid of mortgage interest deduction, Maggie Thatcher quickly replied “over my dead body.” Mortgage interest deduction in Britain therefore remained in place throughout her years as Prime Minister. She also privatized many public housing units so that more people can have stake in ownership and in the country.
However, once she was out of office, Britain eliminated mortgage interest deduction. Some members of Parliament believed, as some in the current U.S. Republican Party have been advocating, that fewer deductions combined with lower tax rates would make the economy more efficient.
The real world never goes the way described in textbooks, or as planned. Today, Britain no longer has mortgage interest deduction. And tax rates are higher (not lower).
