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Could America be witnessing the biggest housing slump since WWII? Moody’s chief economist Mark Zandi believes so. Not only does Zandi believe that sales of new and existing homes will be weak for the entire 2008, but also that home sellers will be forced to slash prices further to combat the vacant house gluttony currently plaguing the United States. Government concerns surrounding the housing market and the possibility of recession, has prompted President Bush to sign off on $150 billion to increase the size of mortgages financial firms are able to handle. Democratic candidate Hillary Clinton believes that more drastic action is required. Clinton proposes $30 billion aid packages to help communities struggling with mortgage foreclosures. With the exception of the North East, housing sales have reached record lows, with the West Coast suffering an astonishing decline of 32.2%. Since August, banks have tightened their loan policies, thereby making the loan approval process more difficult and arduous for Americans wishing to purchase homes. This monetary policy could force the house market into more rapid dissension which has created plenty of anxiety in political circles. “We are seeing the compounding effects of rising subprime mortgage defaults, a weakening real economy and housing market credit restraints,” said Stuart Hoffman, chief economist at PNC Bank Corp. The only positive news to come out of the housing depression is the rising Dow Jones industrial. Investors are predicting another reduction in interest rates by the Federal Reserve later this week. This new found optimism has boosted the Dow Jones to 12, 383.89 as of the end of business on Monday. Housing contractors have also been forced to adjust their marketing strategy. Contractors cut housing prices by the highest amount since 1970. This was mainly a reaction to the awful housing sales in December of last year. This, compiled with the slew of empty homes all across America, has forced contractors to slow production to a snail’s pace. With the dollar slipping against other major currencies, the Central Bank and other financial entities are gathering for a two day summit, with economics experts predicting another cut in interest rates as well as further financial assistance to slumping regions of the country.