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I feel like you really overestimate how greedy the average person is. I don't think most people expect the government to give you a mansion. I feel it is a reasonable position that the government should not allow investment firms to push the average person out of the housing market because the firm wants endless growth. I feel this way because of the current housing crisis. If the crisis did not exist, I would probably not be looking for answers as to why I cannot afford a house with a full time job.
You vastly underestimate it.
A minimum wage worker now has a vastly better lot in life than 99% of laborers from the immediate post-WWI era (but prior to the Great Depression); better housing, better food, better healthcare, and so on. A minimum wage worker right now lives in far, far better circumstances than any kind of subsistence living. But that's not what people see. People see other people around them, compare themselves to what other people have, and determine if what they have is fair and just based on what they see. Why do you think we have so many problems with conspicuous consumerism? No one 'needs' a luxury car, and very, very few people need a lifted Ram 3500, and yet people feel driven (pun not intended) to buy them because that's what they 'deserve' based on what they see peers driving. If people wanted cars based on real need, then Fiats and Smart Fortwo cars would dominate the landscape.
People living outside their means does not mean they expect the government to fund that life style. Your argument is that improving quality of life does not decrease the effectiveness of propaganda because people are too greedy, right?