But one thing is clear: We may know a lot less about the relationship between the mortgage deduction and housing prices than we thought we did.

FORBES: This May Be The Ideal Time To Reform The Mortgage Interest Deduction

However, it was massive government support for the housing industry through the mortgage deduction, rules such as the Community Reinvestment Act, and a multitude of subsidy programs that created the property bubble which burst so disastrously in 2008.

FORBES: Raise Taxes To Clinton-Era Levels? How About Spend At Clinton-Era Levels?

This can be rapidly remedied by reboosting the housing market, which a tax deduction on all (not just first-time buyer) home purchase down payments would effectively do.

CENTERFORSECURITYPOLICY: Center For Security Policy

Studies of the pre-bust housing market found that eliminating the MID and the tax deduction for property taxes would substantially knock back prices, especially in communities with high housing costs.

FORBES: This May Be The Ideal Time To Reform The Mortgage Interest Deduction

After all, they say, the housing market remains so shaky that ending the deduction would send home prices back into a tailspin.

FORBES: This May Be The Ideal Time To Reform The Mortgage Interest Deduction

With the mortgage interest deduction in place, both sources of housing finance, debt and equity, get a tax preference.

FORBES: How Much Money Would Dropping The Mortgage Interest Deduction Raise? Less Than People Think

Fannie and Freddie were surely problematic as were numerous subsidies for home buyers (think the mortgage interest deduction among many others), but then housing soared in places like England and Canada where these subsidies are mostly non-existent.

FORBES: Book Review: Ayn Rand's "Free Market Revolution" by Yaron Brook and Don Watkins

The provision faces opposition from charities as well as the housing industry, which worries about the impact of making the mortgage interest deduction less valuable.

FORBES: Obama Budget Raises Taxes On Rich And Big Estates, Sends $250 Checks To Seniors

The theory: It is an easier political lift to curb such popular breaks as the mortgage interest deduction through a broad reduction of all subsidies than to fight the powerful housing industry head-on.

FORBES: Obama's Cap On Tax Deductions: Not What It Seems

Housing industry lobbyists often make the case that, whatever you think of the mortgage interest deduction, now would be a terrible time to eliminate or restructure the subsidy.

FORBES: This May Be The Ideal Time To Reform The Mortgage Interest Deduction