the insidious american dream

I agree with John Edwards that home ownership is a part of the American Dream, insofar as many people want to own homes. Of course, Edwards takes this to mean that the government should subsidize home ownership to the tune of a tax credit against a down payment.

Just because it is part of the "American Dream" doesn't mean it's a good thing. First off, one reason that we have the current economic issues and a bunch of people being foreclosed upon is because people who weren't ready to buy a house did it anyway. They got trapped into crappy variable rate mortgages, and were screwed when the interest rate rose. So the problem as far as home ownership in this country goes is not that people can't afford a down payment, it's that they don't know what they are getting into as far as monthly payments, and are in far too tenuous a financial situation to be taking on a mortgage.

Edwards also seems to be under the impression that ownership is a financial panacea, saying that "home ownership is the best way to establish a nest egg." This is just plain wrong. For many families, a home can be a good investment... it's about the only investment you can live in. But if you are not going to be staying in your home all that long, or you are getting into a bad mortgage, renting tends to be a better option. Plus, the real estate market is incredibly volatile and you have to pay property taxes on your investment every year, not just capital gains tax at when you cash out.

Plus, home ownership is already subsidized, since interest on your mortgage is tax deductible. The most basic economics/public policy principle is that you subsidize what you need more of. Well, we already have too much home ownership, and we're also subsidizing it. So how exactly further subsidy like Edwards is proposing is going to help anything is well beyond me. What we really need to do is persuade people that they might be better off renting, not encourage them to run headlong into buying when it might not be right for them.