dr. zandi? >> yeah, i don't think that's a good idea. i think the bankruptcy -- i think the states have all the tools they need and that this would be an error. >> i appreciate that. i just want to put that out there because i think we create a problem by going down the path of discussion when renault governors are not asking for it. no one is asking for it really. and it's a very bad thing. let me go into to other areas but for someone to give a thought. i, like senator sessions, and a giveaway i was elected a mayor of city that are locked into a $259 budget with a $33 million hole in it. we had to resolve it. we had a three-pronged attack. one with spending, one was revenue, one is also investment, water, sewer, roads, so forth. and i have turned down when i was mayor, i turned down the federal resources when offered because we didn't have the money. so you can do it. and also sustainability of those resources. and i guess i want to, senator sessions brought up a good point and you're right,

dr. zandi, thank you for your work. i saw the case-shiller housing index predict another bad year for housing. are you in agreement with that? >> yes, i think there will be more house price decline spurred on case-shiller, probably another 5% nationally -- morehouse de -- there will be more house price declines. on case-shiller, probably another 5%. >> i want to come back to that question, because as we look on the horizon here and we look at potential threats to the economic recovery, housing, state and local, european debt situation, middle east -- i would put those four at the top of the list. this committee -- we cannot do much about the middle east. state and local -- really, i think ray and mr. edwards have described it really well. states are taking on their own challenges. the european debt situation we cannot do a thing about in this committee. the one thing we might be able to make a difference in is housing. i want to come back to that. but that will go to senator whitehouse, and the

blinder and dr. zandi if we had not had the federal response, the unemployment would have been 15% in the second quarter and would have continued rising to 16% in the fourth quarter of 2010. there's no question that the unemployment rate has remained stubbornly high. just a little over a year ago three years ago, it stood at 5%. it nearly doubled within a year and has fluctuated in the 9% plus ever since. last week the nonpartisan congressional budget office issued it's budget and economic outlook projecting the unemployment rate will fall only slightly to 9.2% by the fourth quarter of that year and fall farther to 8.2% by the fourth quarter of 2012. and the economy is growing at a much slower pace when compared to past recoveries. when measured against the nine previous recoveries over the past 60 years we see the current recovery lags considerably the nine previous recoveries. why is that? i believe it's because so much damage was done to the fiscal this and financial system in this downturn. if you look

blinder and dr. zandi, if we had not had the federal response, the on implement rate would have been 15% in the second quarter and would continue rising to there's no question that the unemployment rate has remained stubbornly high. a little over three years ago, it stood at 5%. it nearly doubled in a year's time and has fluctuated in 9%- plus range ever since. last week, the congressional budget office issued its budget and economic outlook, projecting the unemployment rate would fall only slightly to 9.2% by the fourth quarter of this year, and fall farther to 8.2% by the fourth quarter of 2012. the economy is growing at a much slower pace when compared to past recoveries. when measured against the nine previous recoveries over the past 60 years, we see the current recovery lags considerably the nine previous recoveries. why is that? i believe it is because so much damage was done to the fiscal and financial system in this downturn. if you look at the previous recoveries since world war ii, some of them