Mortgage debt means that homeowners don't go on strike?

Claim from David Harvey in this RSA Animate on why mortgage interest became tax deductible - I can't find a source for the claim. It immediately made me think of the current state of student loans: debt not forgivable under personal bankruptcy, unlike, say, CC debt. Or mortgage debt.

And I do want to explore his online lectures about Marx:

1. Here's a similar argument from Vincent J. Cannato:

* Federal support [of home ownership] began as an extension of anti-communist efforts in the wake of the Bolshevik Revolution in Russia; as one organization of realtors put it at the time, "socialism and communism do not take root in the ranks of those who have their feet firmly embedded in the soil of America through homeownership."

* A public-relations campaign dubbed "Own Your Own Home" — originally launched by the National Association of Real Estate Boards in the aftermath of World War I — was taken over by the U.S. Department of Labor in 1917 and became the first federal program explicitly aimed at encouraging home ownership.

* In 1921, the program moved to the Commerce Department, where Secretary Herbert Hoover soon became the nation's foremost promoter of home ownership. "Maintaining a high percentage of individual home owners is one of the searching tests that now challenge the people of the United States," Hoover wrote in 1925. "The present large proportion of families that own their own homes is both the foundation of a sound economic and social system and a guarantee that our society will continue to develop rationally as changing conditions demand."

* Before the compassionate conservatism of George W. Bush, there was the empowerment conservatism of Jack Kemp. As a member of Congress in the 1970s and '80s, and as secretary of HUD under President George H. W. Bush, Kemp made it his mission to broaden the reach of the Republican Party beyond the white middle class, reaching out to minorities and the poor. Home ownership was a special passion of Kemp's, and as HUD secretary in particular, he pursued tenant ownership of public-housing units as a way to close the racial gaps in home ownership.

2. Here are some data from the Fed that provide context to the claim:

* In 1910, only a third of non-farm owner-occupied home purchases were mortgaged.

* The non-farm homeownership rate in 1920 was 41 percent; the homeownership rate of farmers was 58 percent

* In the 20 years between 1930 to 1950, for the non-farm ownership rate rate to jumped 7 percentage points, from 48 percent to 55 percent. [Today it is about 66% :]

* Franklin Roosevelt’s New Deal legislation in the 1930s insured mortgages through the Federal Housing Administration (FHA) which allowed savings and loans to take on a little more mortgage risk in their lending portfolios. The Federal Home Loan Bank system provided short-term credit with subsidized interest rates to mortgage lending institutions. The creation of the Federal National Mortgage Association — known today as Fannie Mae — allowed lenders to sell their mortgages to the federal
government and instantly replenish their capital which could be in turn loaned to someone else

* By the 1960s, suburbanization and the policies that accompanied its growth had changed American politics and culture. Many presidential speeches since then have included some kind of nod to the perceived importance of owning a home and have been often accompanied by a variety of new policies. By the late 20th century, owning a home was equated in the popular imagination as an important life goal.

* The deductibility of interest was, until 1986, a key feature of the income tax since its inception in 1913 — anyone who had to make interest payments on any sort of debt was able to deduct these expenses

* “The bulk of the benefits,” says Glaeser, “go to fairly rich people who aren’t particularly close to the margin between owning and not owning. These are people who are overwhelmingly in single-family detached houses, and they would be likely to own that house with or without the home mortgage interest deduction.”

* Being tied down to a house tends to make people less likely to leave an area in which employment prospects are deteriorating. After all, terminating a lease is
much less costly and time-consuming than foreclosing on a house or selling a home, even if the owner breaks even on the transaction. Economists predict this would lead to a decline in “labor mobility,” the ability for people to move to
where the jobs are. A seminal study by British economist Andrew Oswald of
the University of Warwick traced the link between unemployment and homeownership. Oswald looked at the United States, the United Kingdom, France, Italy, and Sweden between 1960 and 1996 and discovered that, _on average, a 10
percentage point increase in homeownership tended to correlate with a 2 percentage point increase in the unemployment rate_.
Shared publiclyView activity