Should the government subsidize home mortgages?

Luis (No)

While subsidizing home mortgages has been a standard policy over the last few decades, the measure is ultimately flawed and dangerous, and if the American government cared at all about its citizens, it would stop doing it. While the measure has indirectly encouraged homeownership through subsidies, it has led many low-income individuals to take on more debt than they otherwise would or should. Such a situation can eventually lead to financial instability, which always has negative ramifications and collateral damages.

Subsidized mortgages also cause market disruption, considering subsidies sometimes artificially inflate housing prices. This is the direct result of artificially increasing demand. Many lower-income people tend to feel attracted to these subsidies, which can eventually lead to a housing bubble—another horrible consequence of the measure. The US experienced this exact reality in 2008 when the government's involvement in the mortgage industry was one of the main factors behind the financial crisis, representing a devastating economic burden for millions of Americans nationwide.

Moreover, government-subsidized mortgages represent a clear case of resource misallocation. After all, the tax-payer-provided money the government uses to fund these subsidies would not only create the problems mentioned above but could also be spent on other social programs in the country, such as education or affordable housing initiatives. Finally, mortgage subsidies can eventually cause severe wealth inequality in the country as the measure usually benefits higher-income households more often, creating social tensions because of the way it exacerbates the wealth gap. While some people need help with their mortgages, the government shouldn’t subsidize them.

Andrew (Yes)

Encouraging large portions of the population to purchase homes is one of the strongest ways to build wealth in society. By building equity through home mortgages, people are keeping a portion of their housing costs rather than paying it all away in the form of rent to some other entity. Building this kind of wealth over time puts individuals and families into much more secure financial situations and helps them establish strong roots in communities. 

While renting is useful for short periods of time and in certain circumstances, ultimately, it is an extractive practice that makes the wealthy more wealthy and the poor poorer. It is dangerous for societies to become this uneven, and for this reason, the government should step in to make mortgages more affordable. When people are not able to purchase their homes, they are put into a situation of permanent housing uncertainty. This creates a situation where unscrupulous landlords and faceless mega-corps can mistreat their tenants. 

Finally, the pro-business, trickle-down approach to wealth building in America since the 80s has left the state of the middle class hollowed out. It is time for the government to step in and subsidize mortgages for ordinary working people. We have subsidized oil companies, auto manufacturers, and other industries when they need it. The government bailed out banks and mortgage lenders when their reckless betting on complicated securities nearly wrecked the entire economy and left many people facing foreclosure. If the American Dream still exists, the government should continue to help working people purchase their homes.