Not helping the poor to help the rich

You must read this article in the NY Times. Some of my favorite quotes are as follows:

"Subprime borrowers will spend nearly 37 percent of their after-tax income on mortgage payments, insurance and property taxes this year...This is about 20 percentage points more than prime borrowers and 10 points more than what subprime borrowers paid in 2000."

"The government has provided an ever-growing pile of subsidies to the buyers of homes." [Seems like a good idea until you read about who benefits from these subsidies.]

"From 2000 to 2005, homeownership rates increased significantly only among households in the top two-fifths of the income distribution, those earning more than $46,883... Homeownership declined for families in the bottom two-fifths of the income scale. In the lowest fifth — where families make less than $20,180 — homeownership was only 42.4 percent in 2005, which was 3 percentage points less than it was 25 years earlier and 26 percentage points below the national average."

"Part of the reason is the structure of government subsidies, which are worth very little to low-income families but quite a bit to families with big incomes. Those well-off families typically do not need government support to buy a home but use it to buy bigger places than they would otherwise purchase."

The example provided shows a person carrying a $1 million mortgage earning a mortgage interest deduction worth about $21,000. Whereas a family buying a $220,000 home with 20% down, would only receive a mortgage interest deduction worth about $1600. <insert grumbling here>