It should deflate.
It'd hurt like hell, and then after a bit, even if it's half a decade, the slate is cleared to go back to prospering over the next coming decades.
But, good luck convincing likely liberal voters they should have the market value of the thing they use to sleep and live in, go down.
Plus, when shit hits the fan, the left can run out with their dicks jacking in their hand, to bail out people and look like they're the heroes. What's the incentive to be responsible?
As an user said, if the non-bubble-caused value of something is closer to half what the pumped up value is, who wants to lose all that hypothetical jack?
People pump mad amounts of money into a house. It's not just a place to live, and call their own space on the map anymore, that you have to pay a bill to have.
It's seen as an investment pile of cash they just also happen to live in. The more the price is pumped up further, the more they see it as such. Screw the markets, I gots me some real estate, so to speak.
Any time something's value is pumped up far past it's actual utility, the bubble eventually pops,
Why do they think it's a good idea? Because for all the Keynesian talk about in the long run, they aren't even looking at things in terms of the mid-run. They want nummy contributey's for merchants wanting bail out insurance, and happy voters falling in line. Responsibility's for losers and sticks in the mud.
Austrians and other schools of economics can predict 95 out of the past 4 market downturns, but at least they do tend to have a somewhat sensible grasp of what measures come back and bite a nation in the ass, in exchange for ongoing, temporary, backlashing prosperity of a market bubble.
