patrick.net

If I were a politician or in government service, I too, would be working as hard as I could to get home prices back up.

This nation under the Bush crew had a Peak Debt of $11.1T of mortgage debt in 2008. We're down to $10.8T as of 3Q09.

"Go us."

The Clinton years saw our mortgage debt end at $5.2T, up a cumulative 75% from the $3T of 1992. Of course, wages and employment grew substantially in the 1990s so the mortgage debt of 2000 was sustainable, compared to the 110% rise in mortgage debt under the Bush team.

Bush and his Party cohorts like Phil Gramm was telling everyone the economy was strong, everybody needs to spend & borrow as much as they want to chase the American Dream. Attempts to rein in the bubble were forestalled by the previous administration, who I assume fully understood that their "Bush Economy" of 2003-2006 was entirely driven by increasing trade deficits coupled with the cash-outs afforded by credit loosening and the bubbling real estate sector.

You can't just go from the go-go decade of the Bush reign of Error to a nice Austrian solution of total global collapse. That didn't work so well the last time we tried it in the early 30s -- the Clinton model of higher taxes on the wealthy coupled with spending restraint seems infinitely superior to this observer.

As a renter there is nothing more I'd like to see that housing collapse to 3X the median household income. But I also understand that the situation the previous gummint passed on to the present gummint is a dicey situation with no simple policy answers.

Troy,

I think you misunderstand. The Austrian school predicts that we will have a collapse. It does not cheer it on, merely points out the obvious. The credit expansion boom will result in a major bust (more than we have seen to date), it can happen sooner if we end the reign of free and easy credit, in which case the pain will be shorter and recovery will come quicker. Or we can wait for the total collapse of the currency. No one is happy about this. And no one is saying we can prevent it, save Bernanke and the elites who are trying to keep their power and position for as long as possible.

AdHominem says

And no one is saying we can prevent it, save Bernanke and the elites who are trying to keep their power and position for as long as possible.

Are you kidding? Please show me any reputable economist who says that it's a foregone conclusion that the currency will collapse. Or is everyone an "elite"?