So what does the populist anger registered in Massachusetts mean for the real estate markets? Nothing good.

First off, people are hurting, hurting bad. They are in debt, too many people don't have jobs, and they can't face higher tax burdens. Anything that smacks of more government and more spending sounds like bigger deficits and higher taxes, which they figure can only make things worse. The stimulus looks like a sop to the banks even though it might have staved off considerably higher unemployment numbers. But so what, in voters' minds their financial condition hasn't improved and their future prosperity appears jeopardized.

The alternative to stimulus is austerity--government spending cuts at the federal, state and local levels. That directly impacts jobs and services everyone has come to expect. Unemployment will go up, not down. Government jobs and contracts to private contractors get slashed. Infrastructure projects and repairs get put on hold, potholes don't get filled, sewer projects are delayed. Class sizes increase in schools, after school programs disappear, parks don't get tended, prisons can't handle convict loads, theaters close, arts groups don't get funding, research and development grants diminish, garbage collection becomes less frequent. The people who provide all these services will be put out of work and family incomes diminished further.

With more people out of work, can the government afford to increase unemployment benefits and welfare related spending? If not, spending cuts can be expected to scissor through social safety nets--at least poor people spend whatever they get in handouts.

Any way you calculate it, austerity means less money coursing through the economy

Instant Insights /

Ouch - Real estate and government retrenchment

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