If you have been wondering why this current American-led financial crisis has been mostly focused on the collapse of Fannie Mae and Freddie Mac, along with the disappearance of any strictly investment focused firms (rather than investment banks) on Wall St., then you need to think about how we deal with housing subsidies in this country. Housing subsidies are great for those of us in the middle and upper classes of earning power because we can afford to purchase a home, and in doing so we not only invest in appreciable assets (home prices have generally been excellent American investment vehicles over the long run) but also gain the mortgage interest tax benefits of owning a home. It's no wonder that the housing market has finally collapsed - when my wife and I were looking for a home a couple of years ago we were being repeatedly told by new home salespersons that we would be able to afford a house that was twice our comfort level because the tax write-offs would be so wonderful on the interest-only mortgages we could obtain. We thought this seemed odd and incorrect thinking at the time and ultimately declined such offers, but now we can see why: it can create massive instability in the housing market.