Ethical Dilemmas in the Financial Industry Katherine Russell, Megan Dortch, Rachel Gordon, and Charles Conrad

The Federal Debt Reduction Commission recently recommended that both mortgage-related subsidies and tax breaks from the federal agencies that help middle- and lower-income families buy homes be scaled back or eliminated. The Obama administration has proposed taking the latter step, eliminating Fannie Mae and Freddie Mac but doing nothing about the incentives and tax breaks that benefit wealthier taxpayers (Morgenson, 2011a; Wagner & Kravitz, 2011). Is their proposal ethical? Why or why not?