Industry News

Economists see credit problems as bigger threat than terrorism

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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. Nearly one in three of members of the National Association for Business Economists surveyed in July and August said the housing boom can be described as "a serious national bubble." Close to two in three economists surveyed cited easier credit standards as the number one or number two cause driving the housing boom. Two years ago, only 14 percent of economists surveyed thought the housing boom could be described as a "serious national bubble," and 34 percent thought easier credit standards were fueling the housing boom. Most of the economists contacted for the most recent survey -- 59 percent -- still say there's no national housing bubble, only "significant" local bubbles. Another 8 percent said there's no bubble at all, and that the market is functionin...