A Washington Post article discusses the state of the economy and prospects for an economic stimulus package passing Congress and being signed by President Bush. When assessing the state of the economy, the article notes the subprime mortgage crisis, slow job growth, rising unemployment, higher oil prices, the latest rise in the trade deficit, and a fall in consumer confidence. Falling house prices did not make the list. The latest data show house prices falling at an 11 percent annual rate. This rate of decline implies a loss of more than $2 trillion in housing wealth over the course of the year. If this rate of decline continues it will have a much larger effect on the economy than any of the items on the Post's list.
--Dean Baker
