We're convinced that no amount of monetary stimulus can revive the real estate boom at this point, even if the Fed seems determined to try. But suppose we're wrong and home prices take off again? Does anyone actually believe that that would lead the economy back to health? Of course not (Larry Kudlow aside). It would simply postpone a debt deflation that by now has become as likely as�the next recession. Keep in mind that when the Fed eased aggressively following the 9/11 attack, it required 'only' about $2.70 of new borrowing to create a dollar's worth of GDP growth. These days, though, the figure is even worse -- far worse --and has been running well above $8.00. What this suggests is that the task of getting consumers to aggressively ramp up the spending of borrowed money on big-ticket items is going to prove well nigh impossible. While the indefatigable and globally indispensable American shopper can never be completely counted out, it strains the imagination to think that he will be able to outrun the economic avalanche that has been gathering destructive momentum in the housing sector these last few months. Even so, as counterpoint we offer another possible scenario from a friend of ours, John D., whose observations have been featured here before. John is in the commercial construction business in Southern California, and it never fails to astound us whenever we hear from him about how strong the industry has been, and continues to be, notwithstanding the collapse in residential building that has already occurred. John is not exactly an optimist, not by any stretch, but his forecast does leave a bit more room for an escape than ours: A False Spring 'I don't believe a 'housing boom' is about to start,' he writes, 'but just enough good
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