Credit Problems a Bigger Threat than Terrorism?

Uh oh. Blood must be running in the streets....

Subprime mortgage loan defaults and excessive household and corporate debt represent a greater short-term threat to the U.S. economy than terrorism, energy prices or inflation, according to a new survey of economists.

This statements leads a report in this afternoon's Inman News, wherein a group of economists with the National Association for Business Economics (NABE)  feel far more jittery about the combined short term effects of subprime default and excessive cororate/household debt than they do about terrorism.

Only 29 percent of the economists feel we are in a serious national housing bubble, while 59 percent believe we are experiencing local bubbles only. Peering five years into the future, 42 percent of these same respondents expect home prices to remain relatively flat (-2% to +2%), while 39 percent believe prices will rise (+2% to +6%); 12 percent expect a modest decline (-2% to -6%); 4 percent expect a large decline (-6% and more); and 2 percent expect the market to boom (+6 % or more).

The just-released report compares the sentiments of economists over a period of two years, and it would appear that most of their perceived short term risks are disconnected from longer term concerns which include health care, an aging population and our educational system.

It would appear that both credit problems and terrorism vanish from the NABE's longer term radar--which leads to a fanciful wish:

That terrorist funds were heavily invested in the subprime mortgage market:-)  

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