It has always been my belief that idea that everyone should own there own home is flawed. The Clinton Administration moved this idea ahead dramatically in ways that started the crisis that the financial markets are in today.
To my understanding, the theory behind promoting home ownership is that owners have more of an interest in their property and neighborhood than renters, so they take better care of the property and raise values in the area, leading to a virtuous cycle of stability, lower crime, higher property values, and higher tax revenues.
I'm not sure how the Clinton administration pushed people into mortgages any more than any other administration, but perhaps someone can fill me in on specifics. Credit has been cheap, but that's not unique to the mortgage industry.
But there certainly has been a spate of people induced into buying mortgages who couldn't afford them, and those mortgages being packaged and bought by financial institutions who had no idea how bad those loans would be if housing prices dropped.
Even if home ownership is a good thing, which can be disputed, my gripe is with the home mortgage interest deduction. There's no reason why people who can afford a million dollar home should get any tax break for it. If the purpose is to get people into their first houses, it would be phased out with income. Instead, the higher your tax bracket, the bigger your subsidy. That's just perverse. I think it's just a sop to the construction industry, which gets to raise housing prices because they know buyers will be able to deduct the mortgage interest from their taxes.
The deduction is in essence a government subsidy of over $70 billion (at least as of 2005). Hard to say we couldn't do better things with that money.
Slate articles on the home mortgage interest deduction here
. Chances of getting rid of it are probably slim to none since you've got homeowners, realtors, and the construction industry behind it.