Any discussion about the origins of the current financial crisis will undoubtedly touch on government initiatives to make home ownership more accessible to lower income individuals. In my experience, this discussion invariably turns into one side pointing at unnecessary government intervention and another side arguing that it was a case of laudable intent maligned by private greed (sub-prime mortgage mess). Anyways, here is an interesting piece (scroll down to “What is the ownership society?”) that argues against government subsidized mortgages. Eric Posner’s argument is that home ownership does not have any intrinsic value and is like any type of investment- lower income individuals are likely to have most of their savings tied up in this investment and will be inadequately diversified against market volatility.
