Matt Towery

This spring, I reminded readers about a 2006 column of mine. That original column warned that America was headed off a cliff with its commitment to a bloated housing market, and that the mortgage industry would come tumbling after.

In March, I amplified on these themes with the suggestion that the real-estate slowdown had started. I offered that the impact on the financial world might stretch far beyond U.S. borders.

Piddling underneath the dark clouds of this gathering storm has been Congress, with its endless train of investigations into everything from the U.S. attorney general to "the sport of wrestling."

President Bush, meanwhile, is so obsessed with Iraq that he might as well move there.

Those outside the insulated bubble of Washington, D.C. -- remember us? -- nevertheless recognize the real issue for the 2008 elections.

It goes something like this: Am I about to lose everything I gained from those days when Alan Greenspan reversed the Fed's policy of instituting multiple hikes in interest rates?

You remember: The interest-rate increases Greenspan implemented to "cool off" the economy, the increases that triggered a recession.

We recovered from that Greenspan blunder only after the Great One reversed engines and started cutting interest rates as fast as he had raised them.

The trouble is that this monetary finagling created a gold-rush mindset among Americans. The nation was informed that the only lasting wealth was land ownership. Land, that is, that many purchased with the bank's money, upon which borrowers then borrowed again to use as a giant credit card to pay for the good life.

Now we're seeing that the underpinnings of the American economy aren't as stout as thought. Greenspan's wild ride has left his Fed successors and government leaders with a big fat mess.

Mark it: In the coming months there's a strong likelihood that a full-blown economic panic will grip this country.

How can the economy be strong when we have lost manufacturing to other emerging nations, when we're taxing our citizens to pay for the well-being of Americans and everybody else in the world, when we have citizens with negligible personal savings, and when we have an aging population that thinks early, lavish retirement should be an entitlement?

Trust me. We're in a five-alarm financial mess. Anybody who thinks the situation is limited to the so-called "sub-prime lending" world is crazy. There are plenty of standard loans out there with borrowers worried sick about making payments -- on their properties, yes, but often on home-equity loans.

Matt Towery

Matt Towery is a pollster, attorney, businessman and former elected official. He served as campaign strategist for Congressional, Senate, and gubernatorial campaigns. His latest book is Newsvesting: Use News and Opinion to Grow Your Personal Wealth. Follow him on Twitter @MattTowery