financial reform

There have been many excellent posts from other blogs the on the future of financial regulation for the future, I think one simple thing I haven't seen people talk about is remove the corporate and household debt deduction. One of the major causes for the financial crisis is the systemic risk caused by the massive amount of leverage. The deductions essentially subsidize systemic risk and are stupid and firms already rely excessively on debt because of transactions. The deductions may not have caused the crisis, but removing them would be an easy way to reduce systematic risk