[quote=briansd1]
Government has good motivations to spread out the cost of the recession over many years. More stable real estate prices:
1/ protect local property tax revenues of local government.
2/ protect the portfolios of banks
3/ reduce the need to bailout 1 & 2.[/quote]

I agree, however….

I think we’re looking at something much broader than that. If there isn’t a significant shift in the scope of economic output in the US, we’re looking at a recession that lasts half a generation.

New home construction has, in the past, been the fuel for the rest of the economy. It has brought us out of recession, time and time again. Creating scores of jobs per unit, thousands of jobs per significant development. From the financiers, the architects and a 1/2 dozen different types of engineers, 20 or more construction sub-specialties, the casual labor, through the sales staff and back to the finance industry. Most all, very decent paying jobs. Poof. All gone.

In essence, growth has been our industry.

Nationally, it is not coming back any time soon. While there may be some small pockets of activity, there is likely to be more, and larger pockets of even longer inactivity. Pheonix, Las Vegas, and I suspect much of Florida may be dead for 10 years or more. Most other areas, without very specific other job creation, is likely to be dormant for 2 to 5 years. Despite some claims to the contrary, I do not believe that new household formations will greatly exceed household disolutions over the next 10 years. Which means we don’t need a whole lot of new houses. (which is to say, my review of the evidence leads me to that conclusion, it is not a “belief” in the idealogical sense.)

If we don’t find something else to manufacture that we, or the rest of the world wants, we’re in deep trouble. (Alternative energy and related technologies???)