COVERITLIVE.COM

8:28	Jamie - Hi, everyone! I'll be your host for this live chat with economist Anirban Basu. We're about a half-hour away from the chat, so please ask your questions now.

8:30

Jamie - Here's a quick bio:

Basu is chairman and chief executive of Sage Policy Group Inc., an economic and policy consulting firm in Baltimore. His clients include developers, bankers, brokerage houses, energy suppliers and law firms, and he's written economic development strategies for government agencies and nonprofits.

In addition to economic development, he focuses on health economics and the economics of education. And he's a regular speaker at the Home Builders Association of Maryland's construction-forecast conferences.

Basu, a Baltimore City Public School System board member, earned a bachelor's degree in foreign service at Georgetown University. He earned a master’s degree in public policy from Harvard University’s John F. Kennedy School of Government and a master’s degree in economics from the University of Maryland. He graduated from the University of Maryland School of Law in 2003.

8:31

8:31	Jamie - And here's a poll to take while you wait:

8:58	[Comment From Mike ] Maryland has the highest per capita number of McMansions. How will this fact affect future homebuilding and both new and existing homebuying?

8:59

Anirban Basu -

The market for larger homes has shifted due to a number of economic and cultural forces. Savings is in, conspicuous consumption is out. Energy savings is in, intense utilization is out. Moreover, the demographic of the state suggest that there will be more demand over the next 10-15 years for smaller homes in more urban settings. Based on that, this is where much of the investment will occur.

9:00	Jamie - Interesting question and answer! We're getting some good questions, folks, but there's still time to submit more.

9:01	[Comment From Bud ] Is there a point in which the federal government will not be able to borrow any more money? Do you think the federal government, like state and local governments, will have to resort to drastic cost cutting and layoffs at some point in the future?

9:01

Anirban Basu - The federal government will have to begin cutting costs in the very near-term, certainly within the next 3 to 5 fiscal years. The deficit will approach or exceed $1.6 trillion this year and there are much larger liabilities in the years ahead. Thus far, the federal government has not been forced to make difficult decisions regarding Social Security and Medicare. In fact, these programs have been expanding. The defense budget has also expanded dramatically for obvious reasons. This cannot persist. The dollar is already plummeting, in part I think because of concerns around the rest of the world regarding our massive debt.

9:02	[Comment From whirrrp ] How has the market been faring for houses at the top end of the spectrum? Has it been affected by the $8000 first-time credit? I am curious as to the health of the market for homes in the higher range, let's say $450,000 and up.

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