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Our economy isn't going to recover until the housing market finds its footing.
Past experience with fiscal austerity at home and overseas strongly suggests that it is best for the economy's long-run performance to restrain government spending rather than raise taxes.
Distressed properties are often vacant and in disrepair, and thus sold at significant discounts. As the share of distressed sales grows, home prices fall.
In a normal time, I don't think economic policy makes a large difference one way or another. But in times of crisis it makes all the difference in the world.
An overheating economy, characterized by accelerating inflation and rising interest rates, is another precondition for recession. This doesn't describe today's economy.
The discussion in Washington has changed dramatically. I mean, it's no longer a question of should we address entitlements - it's no longer a question of do we need to reduce spending in the future.