According to Friday’s New York Times, “the Federal Reserve chairman, Ben S. Bernanke, said in a speech on the subprime mortgage market that a rash of mortgage delinquencies was not expected to harm the broader economy.” This is an understandable statement from Mr. Bernanke’s position, considering the Federal Reserve does not want to incite panic. Realistically however, a large part of the U.S. economy has been based on the real estate bubble, and if the number of homeowners who default on their mortgages continues to rise (and it shows no sign of stopping), then surely economic repercussions will be felt throughout the United States. After all, if people don’t have money for house payments, they are not going to be buying much of anything else in terms of luxuries.
Delinquent Mortgages Not Expected to Harm Economy
