Comments for Congressional Budget Office Projects the Return of the Housing Bubble at http://www.cepr.net , comment 1 to 2 out of 2 comments http://www.cepr.net Wed, 22 May 2013 06:05:07 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/cepr-blog/congressional-budget-office-projects-the-return-of-the-housing-bubble#comment-15509 Additionally, the projection for housing price inflation implies reduced unemployment via the Phillips Curve. This seems inconsistent with many unemployment projections. Unless there is a new, lower, full employment rate in the US. No one is talking about this right now but it seems to be a serious issue. The economy has been growing for two years at 8-9% unemployment. Consumption is at an all-time high in real terms. Firm's continue to earn increased profits with less capital expenditure. Small business is not able to make up the difference anymore. There has been a structural shift that may not reverse anytime soon. The US dollar relative to other currency is not what creates bubbles- capitalism does that inherently. The bigger issue is how to employ more of the domestic workforce in long term value-added production. I fear that the current model in common corporations today may lack the long term focus required to effectively employ the nations current resources, specifically labor. - Ferox Hircus Fri, 23 Mar 2012 23:57:37 +0100 http://www.cepr.net/index.php/blogs/cepr-blog/congressional-budget-office-projects-the-return-of-the-housing-bubble#comment-15455 I don't know that we will see another home price bubble anytime soon. However, I wouldn't be surprised if we saw another asset bubble somewhere else, thereby making the CBO's economic projections accurate. After all, the main source of the American bubble economy remains in place. That is, the value of the U.S. dollar remains massively overvalued relative to the currencies in Asia. So long as the U.S. continues to run massive current account deficits, domestic growth will be characterized by asset booms and busts, which will continue to do tremendous amounts of damage to middle-class households. - JSeydl Tue, 20 Mar 2012 02:10:51 +0100