The idea that everyone should be a property-owner has much to commend it. There is a long and distinguished tradition in the English-speaking world of seeing individual liberty and property-ownership as intertwined.
In his Two Treatises of Government, John Locke observed that "the great and chief end. of Men's uniting into Commonwealths. is the preservation of their Property". In both the United Kingdom and the United States, property ownership was the original basis for the right to vote.
In the 19th century, democratisation meant giving the vote to people who were propertyless. It was not until the 20th century that people began to dream of a society in which every voter would also be an owner-occupier.
Beginning with the Federal Housing Administration in the Thirties, there has been a sustained effort to encourage people to become property owners, with incentives ranging from government-guaranteed mortgages to tax-deduction of mortgage interest payments.
The intention was implicitly conservative, which was why the most cogent proponents of the property-owning democracy were Margaret Thatcher and Ronald Reagan. The theory was that when working-class voters purchased their own homes, they would turn away from socialism. And in many ways it worked.
All over the English-speaking world, owner occupation is now the rule. Before the Thirties, no more than two-fifths of American households were owner occupiers. Today the proportion is 68 per cent.
In Britain, the share of owner-occupiers rose from just under a third in 1953 to a peak of 75 per cent in 1981. The proportion is currently down to 70 per cent, because house price inflation has made it so hard for first-time buyers to get on the property ladder.
But help is at hand. Last week, Gordon Brown pledged to "put affordable housing within the reach not just of the few but the many" by building "a total by 2020 of three million new homes" and introducing "a new regime for 'covered bonds' which will help mortgage lenders finance more affordable 20- to 25-year fixed-rate mortgages".
Mr Brown, who famously sold off the Bank of England's gold at the bottom of that particular market, is now going into property development just as house prices peak. Nice timing, Gordon!
Yet you can have too much of a good thing. And the more I look at the problems of property ownership in Britain and America today, the more I wonder if we now have reached the point of diminishing returns.
Maybe, just maybe, not everyone is cut out to be a property owner. Maybe, just maybe, we should not be bribing and cajoling people at the margin into taking out mortgages and buying houses. And maybe, just maybe, a day of reckoning is approaching, when the costs of this policy will have to be borne not just by a minority of over-burdened households, but by everyone.
Last week I went to two American cities that are the front line of the so-called "subprime" mortgage crisis: Detroit and Memphis. As a result, I now understand what subprime actually means. Officially, it refers to borrowers who would previously have been considered too uncreditworthy to be given a mortgage.
Unofficially, subprime is a euphemism for poor. And consequently, in Detroit and Memphis, it is a euphemism for African-American, which is itself a euphemism for black.
The last decade or so has seen a stampede by banks and other financial institutions to lend money to poor blacks. But these were not mortgages like the ones given to middle-class white Americans in the Thirties and Forties, which were generally for 20- or 30-year terms with low fixed interest rates.
These subprime mortgages were generally for just a few years, with adjustable or floating interest rates. At the point of sale, the monthly payments were alluringly low and often made more attractive by so-called "teasers".
But these teasers were programmed to expire after two years, at which point the borrower was exposed to the full market rate, plus a premium. Since fixed term US mortgage rates have risen by roughly a quarter since June 2003 (from 5.34 to 6.66 per cent for a 30-year loan), the result has been a shockwave running through "subprime" America.
More and more borrowers have fallen behind with their payments. Many have sought refuge in America's relatively lenient bankruptcy system. Many more have found themselves forced out of their homes by foreclosures.
Suddenly, housing is no longer a one-way bet. Across the US, according to the S&P/Case-Shiller index, house prices are falling year on year for the first time since 1991.
In Detroit, which has been among the cities worst hit, they are down 11 per cent. In Memphis, the local newspaper carries 20 closely-printed pages of foreclosure announcements. You can watch the homes in question being auctioned off, 30 at a time, on the steps of the city's main court.
In Britain, too, interest rates have been rising, with similar consequences. According to Morgan Stanley, interest and amortisation payments are now approaching 13 per cent of household disposable income.
The last time they reached that level was during the recession of the early Nineties. Britain, too, has a subprime crisis in the pipeline. Only the acute shortage of new homes in the UK is keeping house prices rising at 9 per cent a year.
To which you may be tempted to retort: caveat emptor. If people take out loans they can't afford to service, they only have themselves to blame.
There are two reasons, however, why this is not the right response.
The first is the abundant evidence of cynical predatory lending targeted at "subprime" neighbourhoods. Some of these mortgages were deliberately designed to be unaffordable after Year 2; they were always going to end in foreclosure. Typical were the so-called NINJA loans, which you could get with No Income, No Job or Assets.
The second point is that it is not easy for buyers to be wary when they are, by and large, so poorly educated when it comes to basic finance.
In 2006, the British Financial Services Authority carried out a survey of public financial literacy. It revealed that one person in five had no idea what effect an inflation rate of 5 per cent and an interest rate of 3 per cent would have on the purchasing power of their savings. One in 10 did not know which was a better discount for a television originally priced at o250: o30 or 10 per cent.
In any case, the problems in the subprime mortgage market are not confined to the borrowers alone. On the contrary, the current explosion of defaults and foreclosures threatens to set off a chain reaction extending right through the global financial system.
It's not just that big banks have allowed their subsidiaries to make bad loans, though you can see some big names (among them Deutsche Bank) in the Memphis foreclosure notices. Much more serious is the way that subprime mortgage defaults can now have an impact on seemingly unconnected financial markets.
The key is the way that subprime mortgage-backed bonds have been used as the underlying collateral for fancy instruments called Collateralised Debt Obligations (CDOs), which are divided into various slices or "tranches", with different credit qualities.
This is financial alchemy: using subprime mortgages to produce a top tranche of triple-A-rated securities is the equivalent of turning lead into gold.
But is it fool's gold? Last month two hedge funds owned by the investment bank Bear Sterns were all but wiped out by their CDO holdings. Others are also reporting heavy losses. Now the ratings agencies are downgrading scores of mortgage-backed securities.
You could see the pain spreading contagiously last week into the credit and currency markets. Down went the dollar.
None of this is to regret the passing of the old housing projects and estates, where the poor existed as tenants, paying subsidised rents for accommodation they had no incentive to maintain, much less improve. But it is to question the wisdom of trying to convert everyone into a homeowner by market forces.
In the absence of universal economic literacy, the property-owning democracy runs the risk of becoming not just uncreditworthy, but discredited.