Last summer, Motley Fool columnist Morgan Housel wrote that the deductibility of mortgage interest would lower tax revenue "by $1.4 trillion over the next decade." Removing the deduction would make home prices more affordable and would also discourage Americans from levering up to buy property.

And yet, very few people favor removing the deduction.

In late March, Robert Shiller stopped by Motley Fool Headquarters for an hour-long interview about home prices, stocks, bubbles, and more. A Yale professor who just published his 10th book, Finance and the Good Society, Shiller is the co-creator of the S&P Case-Shiller Home Price Index and is an expert on U.S. housing.

In the video below, I ask Shiller for his thoughts on the mortgage interest deduction. See what he thinks it's good for, and who he thinks should benefit from some governmental subsidy. (Run time is 1:10; a transcript is below.)

Brian Richards: Are you in favor of tweaking the mortgage interest deduction?

Robert Shiller: I wrote a New York Times op/ed in January advocating switching from a mortgage deduction to a mortgage credit, and it would be aimed at lower-income people. We might have a cap on it -- I think that homeownership is beneficial to this country to the extent that it brings people who might be having difficulty feeling part of the middle class into the middle class. And there have been studies that show that it creates a sense of citizenship and responsibility.

It's also our American style, and I think people feel more involved in this country as a homeowner. But it's not for everybody, but I think that having some subsidy for homeownership focused on lower-income people should probably continue.

For more insights from my talk with Robert Shiller, see: