Being that the only way they can get the Local Gov’s to recover would be to get home prices back at peak pricing so they can collect the property tax etc back to where it was in 2005/6 (that’s what they are basing their required revenue on). And that’s where it would need to be to get the economy unstuck. (just letting it fall/correct would not get you there I am afraid, you would still have to deal with the State/city bills).
The only way I can see that happening is either time (about 5 to 7 years just my guess) or find some way to give everyone (other than city and state workers) a 50% raise (not likely either).
