Homebuilding: Sharpest Drop in 27 years

The bad news on the economy keeps coming. Something has to be done before we have a panic on the world markets. Where is Bush on this crisis? Where are candidates talking about what needs to be done now to avert a disaster, not what they would do a year from now:

Housing starts and building permits plunged in December much more than expected, resulting in a full-year decline in new home construction that was the sharpest drop in 27 years.

And there is little sign things will get better soon. According to government data released Thursday, the full-year total for building permits posted the biggest drop in 33 years. The sharp dropoff in building is one of the reasons that many leading economists are growing increasingly fearful that an economic recession is near, if it hasn't already struck.

The pace of housing starts in December dropped 14 percent to a seasonally-adjusted annual rate of 1.01 million in December, according to the Census Bureau report.

[...]"These figures confirm that the housing recession continues to deepen," said Mike Larson, a real estate analyst for Weiss Research. "Slumping consumer confidence and tighter lending standards have already taken their toll on demand, and the broader economic slowdown we're starting to see unfold now threatens to make a bad situation worse."

For the year, housing starts fell 25 percent to 1.35 million. That decline represents the biggest drop since the recession year of 1980 and the third largest drop since the Census Bureau started tracking this activity in 1959.

It's called a recession:

Cleveland Federal Reserve Bank President Sandra Pianalto said on Thursday the economy has shifted to a lower growth track given restraints led by weak housing prices and falling equities prices.

"The residential real estate market still appears to be in freefall," Pianalto said in remarks to the Association for Corporate Growth, her first comments on the economy in three months.

"We are also seeing a related slowing in consumer spending, perhaps in response to reduced household wealth. Tightened credit market conditions could also hinder economic growth this year for both businesses and consumers," she said.

Pianalto said the U.S. economy should gain traction later this year and into 2009, but added she was concerned about the downside risks to that outlook.

Even as the economy falters, there is a risk that the public's confidence in the Federal Reserve's commitment to price stability will be shaken, Pianalto said.

Apparently the so-called leaders in the economy and in Washington are doing very little to stave off a disaster. Therefore, the people must come up with a solution.