Monday, July 11, 2011

A LESSON LEARNED ABOUT HOUSING

We all know that the construction segment of the economy took a drastic hit beginning in 2006 but a leading economist puts the number of lost jobs at 2,200,000!  If those were the only jobs to have been lost over the last 5 years, it alone would have sparked a severe recession. 
The construction industry currently has nearly 2.2 million fewer jobs than it did at its pre-recession peak in 2006. But then, the housing bubble of 2006 and 2007 gave the industry far to fall. A combination of economic growth and financial innovation encouraged home-buying pre-recession, driving housing demand—and thus, construction--sky high, according to Joel Prakken, chairman of Macroeconomic Advisers, an economic consulting firm. In order for construction jobs to grow again, the current glut of unoccupied houses will first have to be purchased, and demand for new homes will also have to drastically increase. "The previous peak [in housing] was unsustainable," summarizes Prakken. "I hope we learned that lesson and won't drive back toward that peak unless there's demographic reason to build houses."

So why isn't the Federal government looking for ways to help bring back those jobs?  If the money spent to "secure" our freedom by waging wars on foreign soils were spent instead putting our unemployed back to work on rebuilding our nation's infrastructure, who knows what would happen.

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