This is the Cato Daily Podcast for Thursday, September 2nd, 2010.

I'm Caleb Brown. The decline in the U.S. housing market comes after the expiration of a tax credit for first-time homebuyers

and the still unsettled market for housing.

But according to Cato Academic Vice President Jim Dorn, if Canada didn't have a housing bubble

and doesn't protect or subsidize home ownership nearly as much as the U.S.

Why do Canadians have a higher rate of home ownership?

The problem with the housing market is,

instead of letting the market set the prices, obviously, the relative prices, which should be set by consumers' preferences, their income, prices are related products like rental units and technology and things like that, you know, the government in effect thinks that people have a right to own their own home. It's the American dream.

Well, it might be the American dream, but it's not a right, because that right entails an obligation of other people to help support those people.

Nobody's got a right to my money or property.

At least I shouldn't have.

Over the decades, the home ownership has been sort of sacrosanct for politicians, so they've done

a lot of things to promote home ownership.

They've built a lot of things into the tax code, special benefits

you get for owning a home, and we have a tax system that's based on debt to begin with, it seems like at some point that has to come to a head when you've

created all these incentives that are distorting this market.

Well, it's coming ahead already in a sense that the stimulus program,

you got the tax credit for first-time home buyers.

And as soon as that ended, of course, the demand shrunk somewhat. And those tax credits or

housing subsidies had relatively the same effect, they artificially increased demand since they're given to the consumer, basically,

which means a higher price.

So they're going to be paying a higher price.

...