“The U.S. economy is experiencing a significant housing correction. This correction was inevitable after years of unsustainable home price appreciation, and it is exacting a penalty to our economic growth.” – Treasury Secretary Hank Paulson on Short-Term Growth Package
During the Treasury Secretary’s news conference Q&A, he added: “This market needs to correct. We’ve had unsustainable growth for quite some time.”
Journalists were so focused trying to get specific stimulus details that they completely ignored Paulson’s underlying message: the housing market will not pick up until prices drop to the level the majority can afford with conventional mortgages. No type of economic stimulus would be able to sustain current bubble-level housing prices.
In this important election year politicians have the urge “to do something”. Even if a bipartisan package is agreed upon and Americans received checks before November 4, inflation has washed away their purchasing power that they may not make it to the mall.
Treasury Secretary Paulson Statement at News Conference
President Bush Discusses Economy, Growth Package