We’ve had a bunch of kind of technical topics lately, and this week we’ve got one more before we get back to some less stuffy issues over the holidays. (Plus, new topics will be ready on Monday!) This topic involves something that the government devotes a lot of money and effort to: Promoting homeownership.
It’s a total myth that these programs caused the financial meltdown (although it’s an article of faith among conservatives). Still, the bursting of the housing bubble lets us take a hard look at whether the government promotes homeownership in the right ways, and whether it’s time to scale back some of it and devote the resources to new priorities. President Obama has proposed an ambitious – in some ways, though not in others -plan to reform housing promotion policies, including reforming “Fannie and Freddie,” the two quasi-governmental institutions that do the bulk of the heavy lifting. Housing policies affect a lot of Americans and it’s high time we brought it out of the shadows.
On Monday, I’ll open by explaining a little about the biggest ways government encourages and directly or indirectly subsidizes homeownership. They include the famous (mortgage interest deduction, Fannie and Freddie), but other stuff, too. Then, we can debate the issues – including whether helping people afford a house should be a major priority of government and a major use of taxpayer dollars at all.
Discussion Questions –
- Why does the federal government promote homeownership at all? What is the justification?
- How does the government do this?
- Who really benefits from these policies? All Americans? All homebuyers? Some homebuyers? The financial industry?
- What does subsidizing home buying cost us, in terms of taxpayers’ money, distortions of free markets, and increasing financial risks to the economy?
- What would you do about it? Will anything get done, given that powerful interests benefit so much from the status quo?
Gov’t subsidies for home buying –
- How the government subsidizes homeownership. (I’ll explain this stuff more simply)
- Obama has proposed some major changes in this area. Recommended or, for more, see here.
- Obama’s approach neglects a lot of Americans. Skim.
Is it time to scale back this stuff?
- Yes. Get rid of the 30-yr, government-backed mortgage. Recommended
- Besides, there’s no reason to valorize owning a home or for big-time government support for it.s
- No, promoting home buying is a necessary and vital government function. Recommended.
NEXT WEEK: Christian Ethics for the 21st Century.