This is a long-term problem for the President, the next President and perhaps, the President after that.  The middle-class of America was crushed by the burst housing bubble.  Retirement funds are gone and any notion of passing wealth to the next generation is a mirage.  The decline will change the way politicians talk about the American Dream.  The land of possibility has become the territory of limited aspirations.   Should housing not recover its value, millions will pay more in mortgages than what their homes are worth.  In response to that, they are reducing debt.  Look for American consumers to buy less and make-do for years to come.  That in turn will be a drag on the economy.  

While this might be good for a country that was out-of-control during the heady days of the bubble, it  only makes the job of the President harder.  How do you convince people to live happily with less?  It might be possible if Americans can start working again and if unemployment falls back to a more normal range.  But that isn’t happening quickly either. It is a deep-rooted PR challenge.

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