One of the main aims of federal housing policy has been to make possible the thirty-year fixed-rate mortgage, a peculiar financial device that wouldn’t survive a day in the economic wild. What lender in their right mind would hand out thirty-year loans on fixed terms to virtually anybody with a job? But the federal government backed those mortgages and made the interest payments on them into large tax deductions, and so they became the cornerstone of the American housing market. But they became something else, too: a hedge against inflation.
