Why do we continue to subsidize the real estate industry that is the most tax favored in this country?

                Why do we continue to subsidize the real estate and mortgage industries?  Here we are a year after they helped to cause the biggest financial meltdowns in our lifetime and the federal government is providing tax credits of $8,000 to new home buyers and $6,500 to previous home buyers.  Interest rates are at an all time low and housing prices have fallen, yet we need to do this?  My lowest mortgage was 8%.  You can get one for under 5% now.  These low interest rates are also hurting the value of the dollar as it declines relative to other currencies which we should be very worried about.  We don’t need the McMansions and never did . We should not be putting  this much emphasis on one asset class when we are investing although I'm sure real estate agents have another very biased opinion.  How many real estate agents have said you can put 25-30% of gross income towards a mortgage.  That's a totally ridiculous number if you ever plan doing much else.  

              No other investment has the tax favored status of real estate.  You get to deduct the interest on a mortgage, property taxes, interest on  a home equity loan (yea, let’s spend all of our money now loan), and the home sale exclusions on the profits of your home.  Now all of us are paying for  the reckless promotion of real estate and these types of policies will just continue that trend.  The fiscally prudent people who live well within their means are and will continue paying for this mess for a long time.  Thank you.