该不该给你住房补贴? 美国政府很纠结

August 21, 2011 - LAURA SULLIVAN, host: We're back with ALL THINGS CONSIDERED from NPR News. I'm Laura Sullivan.

SULLIVAN: Say you own a house in St. Paul, Minnesota. It cost you $172,000, that's the median sales price of a single family home in the U.S. right now. You're able to make your monthly payments, but like many Americans, just barely. This is your little slice of the American dream.

Now let's say someone tells you they're going raise your interest rate, and they're going to cut the value of your house, and they're going to take away the tax deduction that you get for mortgage interest. And what if that person tried to tell you that all of that would actually be good for you? How much help should the government be giving homeowners?

There's a small group of economists and even a few policymakers who say Washington needs to stop propping up a broken system. Viral Acharya, a New York University professor, is one of them.

VIRAL ACHARYA: The whole slew of subsidies that we have for housing in the United States are not in the end making everyone better off.

SULLIVAN: Acharya co-wrote a book called "Guaranteed to Fail," and it argues that the American housing system needs to be radically rebuilt.

ACHARYA: Our long-term proposal is to reduce the extent of homeownership subsidies that we are providing, so wind down Fannie Mae and Freddie Mac in the long run, and second, remove the tax deductibility of mortgage interest rates so that we are not distorting the system to over-borrow on houses.

In the short run, you would have to deal with the problem that there are many underwater mortgages out there. We should do decisive one-time principal write-downs on these mortgages. So my proposal to essentially soften the blow for those who are most heavily indebted is precisely to ensure that the transition doesn't end up being, one, where we are just stuck in a housing market that becomes completely illiquid because of a one-time shock.

SULLIVAN: What you're talking about is higher interest rates. Your house is going to be worth less, and you're not going to get a tax deduction on all that interest that you're paying on your house. I mean, how are you going to sell this to people in the middle?

ACHARYA: It's to essentially convey them the right message, that while on the one hand, you get all these deductions and subsidies, on the other hand, it's fueling a housing price in the economy. So, yes, you got the subsidy, you got a lower interest rate, but it's not just you who got the lower interest rate. Everyone else around you got the lower interest rate. So they all want to consume more housing. The property prices therefore went up, so the amount of property you wanted to buy actually cost you more than what it should have in the natural equilibrium for the economy.

So what we have not done is to convey to people the right and the full economic content of how the subsidies are not in the end making everyone better off.

SULLIVAN: I mean, this ship has sort of sailed. You know, millions of homeowners are in these homes right now. I mean, how do you tell them you're going to have to move because it's better for the economy overall?

ACHARYA: So just to be clear, I don't think the existing subsidies, those that have already bought houses and those who are claiming deductions would go away. The idea would be on new purchases. So what this is going to do is that in the refinancing market or when you're trying to sell your house, the new buyers are not going to get the tax breaks in some sense.

Maybe we could put in place a rental subsidy in order to put the housing and the rental on equal footing that would suggest that if it's going to become easier to rent your property, there would be people who would be willing to buy houses in order to do so.

And note that once you remove the subsidies, actually housing prices should come down. As a result of it, more people should be willing to sort of buy houses in the first place. So there's sort of all kinds of countervailing effects. All distortions that we have created are going to one by one start getting fixed, and those would actually enable us move the long-term transition out of the current mess or debacle that we have in the mortgage finances.

SULLIVAN: Will fewer people own homes?

ACHARYA: The historical evidence seems to suggest probably not. If you look across, say, 25 largest countries of the world, United States in terms of its home ownership rate sits right at the center, which seems to suggest that the whole slew of subsidies that we have for housing in the United States is neither sufficient nor necessary to produce extremely high homeownership rate.

SULLIVAN: That's Viral Acharya, a New York University finance professor and co-author of the book "Guaranteed to Fail." He's in our New York studios. Thank you so much.

ACHARYA: Thank you, Laura.