I have found that this article sums it up best.  Please visit  www.workingre.com/workingre/rise-and-fall.html

John Liffland hits on all the major points: Greenspan and interest rates-setting America up for collosal failure for not recognizing all the contributing factors of inflation (especially energy costs, which how anybody couldn't see their gas pump bill tripling over the last few years, mortgage lenders (not just predatory lending and fraud, but ridiculous loan programs that were unrealistic in terms of ability to finish paying back), appraisers (uneducated, improperly trained, and pressured to hit numbers or lose potential work--I am an honest appraiser and have lost work/clients because I was blamed for the low value of the house (this happens much more than one would ever expect, which in turn leads to giving the uneducated appraiser the job because they couldn't appraise a property without being given a number from the lender to hit)), investors (where they came from, and where they've gone), and how all this ties into the assessors issue to produce a reliable assessment and the proper tax revenue to be received.

The economy is in trouble.  The dollar is week, and now we are seeing bailouts coming from somewhere other than domestically.  China is quickly gobbling up resources, and becoming the global power of the 21st century and this started with the US so willing to buy up there products.  China, and India too, have become the manufacturing centers of the world.  When was the last time you called a customer service line that didn't get routed to India.  Jobs are leaving much more rapidly than they are being created in the US.  Cheaper labor, and a global market have left the States behind in the dust.  My grandmother is a staunch believer that you buy American.  Let's be honest though, we are all tied to cost, and if someone else can make the same product for cheaper, our own capitalistic market will tell you the cheaper wins out.  Take some time and go around your house; how many items say "Made in USA", probably not as many as "Made in Taiwan".  We have outsourced almost everything, manufacturing to customer service.  What America needs (which is a little too late in my opinion) is a history lesson of what happened to Spain 5-6 centuries ago.  They had wealth coming in from the New World and they began outsourcing everything, crippling its pseudo-economy, leaving their public uninformed and uneducated with no skills to build a better tomorrow.  A little creepy in the similarities of today.  People want to complain about illegal immigrants taking all the work; more like taking the jobs that were "beneath" us.  The good ol' American Dream of hard work can make it happen, has turned into "Give that hard work to somebody else".  Lookout, wait until the investors in our real estate market turn out to be the one who was taking your call about your VISA bill.

Why can't America bail itself out?  A question we have to research is where has the government spent it's money?  9/11.  Osama Bin F-Face may not be able to blow up America, but it seems as though he has had a helping hand in blowing up our economy.  We have spent an incredible amount of money and man power in Afghanistan an Iraq; for what, to bring Democracy to the Middle East.  Time for a quick history lesson;  The Crusades.  They didn't work then and it is not working now.  Our government officials need to learn the saying "Learn your history, or you'll be damned to repeat it".  Well, to me, it looks as though our leaders missed more than one history class, and now we will be the ones who expense the lesson.  The only question left is how long and how hard this will affect us as a nation.  Is this the next Great Depression?  Maybe.  

How do we solve this problem?  I believe first and foremost we need to make a massive effort (an unprecedented financial backing) in finding a new energy source.  This will end our dependency on foreign oil, and may make us the world's energy broker (if indeed we discover a new energy source).  We need to stop giving tax breaks to jobs being taken overseas.  Why are we giving other nations the advantage; for a couple of fat cat corporate heads, not impressed.  We also need to put much more money into education.  Our national education plan is a joke and feeds the "Circle of Stupidity" that is taking over America.  No child left behind, more like bring all the kids back to the level of the least intellectual of the group so that one not-so-bright child doesn't feel bad about him/herself.  This does not work.  Texas manipulated the system to make it look as though it was a good one, when in reality, the less than bright students were held out of the testing, improving the scores on paper.  Government grants and loans given to research, bringing jobs back to the States, and improving a weak and lost education system are the things that can turn this around.  This is not an immediate solution, but there is not an immediate solution.  We need to be future-seeking, not future-giving away. With more jobs and money, homes will be sought after again; maybe not so much as an outsider investor, but the the families that can now afford them, without the ridiculous loan programs, so they can keep them.

The problem is here, now we have to fix it.