Underwiting real estate investment now is a political risk assessment

Implications: In my mind, the debate as to housing affordability and commercial real estate viability is over.  The game is lost as $ 21 trillion in housing value will become $ 15 trillion in the next few years and commercial real estate values will drop 25 to 50 % on the average in the next few years. 

Analysis: I understand that all are not as prone to accept the finality of this conclusion, but I think this result will be inevitable.   The question is how do we as a nation pay this bill since we’ve cashed out and levered our way to a financial system that has supplied funds against the previously record high values.    The final solution as to the vehicles we will use has yet to arise.  We do not yet know the full extent of our losses in the financial system and the severity of the threat to the sovereignty of the United States may not yet be transparent, dare I say is not transparent.  We can say only that 15 to 20 major banks across the world and the U.S. are seeking additional capital in large amounts and the U.S. Banks as well as Wall Street have tapped the tills of the U.S. Federal Government for liquidity in a serious way.  We are implementing credit policies now that are said to be the opposite of those restrictions that caused the depression of the 30’s in the hopes that we know how to avoid the coming financial free-fall.   
Local, state and federal politicians are beginning to seek relief at any trough for their constituents.  And the constituents for their part are demanding that relief or else.  To me it’s amazing how many homeowners and speculators see a way out without recourse at the beneficence of their lender or a government entity.  Bluff, bluster and posing in this matter are becoming a daily ritual.  However, I think we will strike a balance somewhere between poles which have yet to appear.  
The fear I have is that we do not have the resources as a nation or as a one world economy to meet this challenge.  The economic order that we enjoy in the States is the result of at least perceived stability in the U.S. dollar.  No merchant or other businessman yet refuses the dollar in payment for goods or services in the 50 States, but that is not the case worldwide.  Even where the local currency is junk, the dollar is sometimes refused in 3trd world countries at this point.  
As one of our colleagues here has recently written, it is a much shorter journey between riches and ruin now that we have not shown financial stability or discipline for the past 40 years.  Ruin appears to be imminent for many if not all who are participants in these real estate markets.  The problems are systemic, and while some may be very skilled at the operation or development of property, they may not be able to use these tools as they are only worthwhile when the U.S. government is capable of providing order to the financial markets.  
We have met the challenges in past administrations through our efforts and policies.  Our financial health is once again now dependent on our political skills and will to get us out of this condition.  Will we be able to develop a framework like the drafters of the Constitution or will we just put the usual band-aid on the issue to delay the inevitable?  I hope we’re able to dig deep and clear this mine field with a set of programs which will not only help the residents of the United States but reinforce/reestablish the leadership of the United States worldwide.  Time will tell.