That's good to know, some folks might have thought the loss of $5 trillion in housing wealth, more than $60,000 per homeowner, was a big deal. Standard models indicate that this will lead to a large falloff in consumption spending (@$200 billion to $300 billion in annual spending). This falloff coupled with continued weakness in the housing market, declining non-residential construction, weak investment, and cutbacks in the state and local spending, might be expected to lead to a serious downturn. Of course record loan write-offs might also be expected to weaken the economy.
But the Post told readers that "the economy is in only a modest downturn, with economic growth still slightly positive and fewer jobs being shed than in recent recessions." So, why worry?
If you enjoyed this article, please consider making a tax-deductible donation today. For over 30 years, The American Prospect has delivered independent reporting that exposes corporate power, investigates political corruption, and analyzes threats to our democracy. Unlike many media outlets, we’re not owned by billionaires or corporations—we’re powered by readers like you.
Today’s independent journalism faces unprecedented challenges. Your support makes our reporting possible and keeps our work free and accessible to all. Whether it’s $5 or $50, every contribution helps sustain our nonprofit newsroom.
Join our community of supporters and make a donation today to help keep independent journalism thriving.
Copyright 2025 | The American Prospect, Inc. | All Rights Reserved
