Distressed properties are often vacant and in disrepair, and thus sold at significant discounts. As the share of distressed sales grows, home prices fall.

The key to house prices is the share of foreclosure or short sales in the total housing market. When that share rises, house prices will fall, because distressed properties sell for significantly less - currently around 25 percent below non-distressed houses.

Yes. I don't think it would be appropriate at this point to raise taxes on anyone, certainly not in 2011.

No one should expect the value of their house to appreciate quickly - counting on your home to be a significant part of your retirement saving isn't a winning strategy - but it is reasonable to expect that prices generally will rise with at least the rate of inflation for some time to come.

An overheating economy, characterized by accelerating inflation and rising interest rates, is another precondition for recession. This doesn't describe today's economy.

The extension and expansion of the payroll tax holidays for workers would be number one on my list and key to avoiding recession.

Past experience with fiscal austerity at home and overseas strongly suggests that it is best for the economy's long-run performance to restrain government spending rather than raise taxes.