ABSTRACT

If the 2008 recession was callously unsparing of the American homeowner, it was equally unkind to the nation’s financial confidence. A precipitous collapse in housing prices exposed the truth that the US public – along with financiers and government regulators – had for far too long willfully avoided: America was writing checks it could no longer cover. In the aftermath it became clear that bankrolling consumer spending on the back of a home property bubble does not make for sound fiscal policy.