Possible Effects of Housing on the US Economy

Implications: The article discusses the role of federal fiscal policy and its impact on the US economy and provides an interesting perspective that should not be ignored.

The author is concerned that we are not treating the problems in the mortgage industry seriously enough.



Analysis:

I thought the perspective of the author is interesting and thought-provoking and certainly worthy of further discussion. 

The housing industry fed a major part of the economic expansion during the past several years and its malaise does not appear to me to be a temporary hiccup.

We must recognize that home prices in many parts of the country  have risen beyond the ability of buyers to purchase fed in large part by easy access to credit. 

As the mortgage industry focuses on implementing sound business practices, home prices are likely to continue facing downward pressure.

As the psychology of home owners settle down, their propensity to consume by dipping into their home equity is likely to face downward pressure as well.