Ready to Burst
Jun 23rd, 2005 at 8:33 am by Susie
Patrick Doherty on the housing bubble:
What is confusing, however, is just when the housing bubble will actually burst. Greenspan’s Federal Reserve has tried gradual pin pricks but interest rates have stayed both stable and low. Most analysts agree that this is in large part due to the persistent foreign demand for American debt, led by China and Japan. America continues to run record trade deficits, meaning as a nation we are wracking up more and more debt. That means that not only are the market fundamentals weak here at home, the U.S. housing bubble is throwing the global economy way off balance.
And that is the most worrisome aspect to this whole situation. No one, including Greenspan, knows how or when this bubble will burst—much less how to get it under control. The economy is not responding to normal measures.
For Democrats to be silent about this looming crisis is foolish. Anyone who owns or wants to own a house is seriously concerned about this issue, and the Dems are silent. It’s an easy way to start speaking to a ready-made constituency. More cynically, if or when the bubble bursts, if Dems have not examined the issue, they will not be ready with credible proposals and capitalize on the “Hooverization� of George Bush.
