[quote=EconProf]……housing values must stop falling for a real recovery to take hold.[/quote]
This is total nonsense.
Our economic problem is not that homes are too affordable.
Our economic problem is that too much of domestic US demand goes abroad, turning into Chinese jobs and income. If we had a lower trade deficit, we wouldn’t have such an enormous flow of foreign savings landing on our shores, inflating bubble after bubble.
Either China (and other persistent net exporters) must increase their US imports, or we need to reduce their exports to us.
Yes, I am perfectly aware of the Smoot-Hawley Act and its impacts. Nevertheless, we have a structural problem that must be solved, and inflating asset bubbles isn’t a solution.
