Simple - lenders will no longer be handing out stated income, interest only, no money down, adjustable rate balloon payment mortgages like candy on Halloween. Without tens of billions of dollars worth of loans being made to people who clearly aren't qualified to pay on them, there won't be tens of billions of dollars of funny money flooding into the real estate market.

Voilà! Affordable housing.

My guess is that upwards of 50% of the new home mortgages made over the past 5 years or so were completely fraudulent, going to borrowers who couldn't hope to keep up with the spiraling interest payments, let alone pay on the principal. A lot of folks are also going to be defaulting on fraudulent refi loans. Oh well.

Hell no there shouldn't be a government bailout. Let Bozilo and his fellow corporate idiots bail themselves out. Better yet, seize their assets and use that money to bail out any borrowers who can prove they were mislead (as I'm sure plenty were).

And here's a lesson in How the World Really Works: if everyone bought houses in the $500k range, and owe $400k+, nobody can or will sell in the $300k's.

Unfortunately, many to most of the suckers who "bought" houses in the past few years (i.e. took out massive $500k loans) have little to no equity in their property (or negative equity), and soon won't even be able to afford their minimum monthly payments (assuming they still have good paying jobs to begin with, no unexpected medical expenses, etc.). These individuals won't be selling their homes - the banks will, once they've been repossessed. And you can bet the banks will be unloading these properties as fast as they can, which means they'll be dropping the price.

And that'll lead to more and more people walking away from homes they have little to no equity in, as they won't stand a prayer of selling the home for a price that'll pay off their mortgage. It's a vicious circle.

California actually had more people moving out than moving in, at least for a few years after the dot com crash. The population continues to grow, but the majority of the growth comes from illegal immigration and births, with the bulk of those children being born into families too poor to afford even a $200,000 home, let alone a $500,000 one.

Population growth isn't going to save California's real estate market, let alone the rest of the country's.

Take those Boeing planes you mentioned. Are they really "manufactured" in America? They're assembled in America, but many of their components come from overseas. Sure each plane sells for umpteen million dollars, which looks impressive, but many of the parts come from Asia and Europe - we've allowed our manufacturing sector to deteriorate to such a point that we couldn't make those components domestically even if we wanted to. And that's a real problem, as it's the manufacture of those components which creates the most jobs and pumps the most money into consumers' pockets and the government's tax coffers (indeed, it generates an entire ecosystem of jobs, an Amazon rainforest of interconnected industries).

I also question how all of these items are valued. For example, China may ship over a container ship full of airplane parts, each valued at some ridiculously low sum. Boeing assembles those parts into a plane that's miraculously worth a zillion dollars more than the value of the individual components. Anyone can see this is a scam, and it's not gonna last for very long - just long enough for the senior executives to cash out and move on.

Manufacturers like Boeing are living on borrowed time. Today the Chinese are manufacturing more and more of the components of complex, expensive machinery. We saw this happen before, in the computer industry. Players like Dell began sourcing their components from China. Then they opened assembly plants in China. Obviously, the Chinese learned the business from Dell, and quickly copied it. Lenovo is an example of where that story ends - with Chinese companies displacing American companies in a market the American companies invented.

Next China's going to start assembling and exporting their own planes, cars and other heavy equipment, just as they started assembling their own computers. They'll rapidly displace companies like Boeing and General Motors in the marketplace once that happens.

This is what happens when you export your competitive advantage for a short term gain, in this case for cheaper components. Sure you boost profits for a decade, but in the end you're out of business.

And yet, as a group they are making a huge contribution to Social Security they will never collect due to using fake SSA cards.

Assuming they're being paid above the table.

You're also missing out on the billions in education expenses, medical care, police protection, prison incarceration and other unpaid bills illegal aliens leave in their wake here in the US. I'm guessing that more than offsets the Fed's haul of Social Security money from those illegals who are being paid above the table. 27% of Federal prison inmates are illegal aliens, for example.

We won't even go into how all of those illegal aliens depress wages, reducing other Americans' incomes and the amount of tax the government would otherwise be able to collect from those individuals but can't.