Typical State tactic; put something in place that will be politically difficult or impossible to remove later. I like how biased the article is too; it's clearly worded as an editorial-- these people "merely" walked away from their homes-- even though it's supposed to be a news report. And on top of it, they quote a supporter of the bill-- some sociopath politician-- but don't offer any perspective on competing views.

Of course, this also illustrates the moral hazard introduced by the State; how many of these people would have pursued "short sales" had this hyper-specific tax law not been introduced in the first place? Further, how many people would have pursued "short sales" had the State never started taxing income in the first place? Or better yet, how many of these people would have decided to not buy a home they couldn't afford in the first place if the Fed hadn't been suppressing interest rates, and the State hadn't engaged in all of its "urban planning" initiatives?

This is distortion on top of distortion on top of distortion. And there are a million such instances in the United States were similar distortions are occurring daily; heck, they name a few in the article-- "tax deductions for teachers' out-of-pocket expenses for school supplies, for college tuition and fees... and for the cost of energy-efficient improvement made to homes." All of these things are distorting the markets and creating malinvestment, by definition; after all what would be the point of these laws if people were already engaging in the behavior desired by the laws? Add all of these things up, and it's easily in the trillions of dollars, annually, of capital that is malinvested due to the State.

Then people wonder why there is a lack of opportunity. A scapegoat is needed, so the power brokers blame it on "deflation", and so on.