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"Putting people to work is more important than putting more art on the wall of some New York City gallery frequented by the elite art community," said Republican Rep. Jack Kingston of Georgia during the debate.

Lynch calls that attitude "uninformed and perhaps disingenuous." His group estimates that non-profit arts organizations generate $166.2 billion each year in cultural and related spending such as restaurants and parking, and they produce $30 billion in tax revenue and 5.7 million jobs.

"Those jobs are every bit as important as an auto industry worker," Lynch says. He says 10,000 arts groups employing 260,000 artists and support workers could close this year.

Other economists see a brighter picture in the long term. Wachovia economist Adam York expects home values to keep falling until 2010 but is optimistic they will recover.

"The one saving grace is the population is growing by 3 million people a year," he says. "They need to live somewhere. That means more roofs."

When the housing bubble began to deflate in 2006, history had a sobering lesson to teach. Home values had closely tracked three common-sense measures for many years:

•Income — Home values floated at about three times average household income from 1950 to 2000. In 2006, the average household income was $66,500. Under the traditional model, home prices should have been about $200,000. Instead, the typical home sold for $301,000.

•Rent — Homes traditionally have sold for about 20 times what it would cost to rent them for a year. In 2006, houses were selling for 32 times annual rent.

•Appreciation — Existing homes grew in value by less than 0.5% per year, after adjusting for inflation, from 1950 to 2000. From 2000 to 2006, home prices rose at an average annualized rate of 8.2% above inflation and peaked with a 12.3% jump in 2005. Housing prices began to fall in the second quarter of 2006.

Low down payments and ARMs gave homeowners enormous financial leverage to pay high home prices. Leverage boosts buying power through debt, the same way a 100-pound woman uses a lever to jack up a 3,000-pound car.

Consider a couple with $20,000 cash. In 2006, they easily could get a 5% down mortgage to buy a $400,000 house. Today, a 10% down payment would limit the couple to a $200,000 house.

The Great Depression of the 1930s was preceded by a real estate bubble, also fueled by loose lending standards and shrinking down payment requirements. Those real estate problems — and solutions — echo today's.

Florida real estate was the epicenter of speculation in the mid-1920s. Developers ran up prices by selling to borrowers who put as little as 10% down. Those were shockingly risky loans at a time when the standard mortgage lasted five years and required a 50% down payment.

The risky loans went bad first, but it was the spread of credit problems to the supposedly safe loans — five years and 50% down — that caused the housing market to collapse.

The five-year loans required no payments to reduce principal. Homeowners expected to refinance mortgages when the loans expired, usually with the same lender. The stock market crash led to a "liquidity crisis" — no money to borrow — that dried up mortgage refinancing.

Millions of families lost their homes to foreclosure. Falling prices on nearly everything — homes, farm crops, wages — made consumers reluctant to buy and banks afraid to lend.

As part of the New Deal, the government took control of millions of loans and restructured them into something new: the modern mortgage, with 20% down and principal that is repaid over the life of the loan. The government extended the mortgages to 15 years, then 25 and finally 30.

When World War II ended in 1945 and the Baby Boom began the following year, the 30-year, fixed-rate mortgage became a cornerstone of society and led to unprecedented levels of homeownership.

The danger of rapidly falling home prices is that — similar to the Depression — potential buyers and lenders will stay away, fueling even sharper price declines.

During the housing boom, buyers expected prices to rise, so they were quick to buy, borrow and pay a premium. As prices drop, home buyers wait for better deals. says economist Dean Baker of the liberal Center for Economic Policy Research in Washington, D.C.

Lenders want bigger down payments to protect against the falling value of collateral. Homeowners lose equity, so they can't buy other houses. "Price declines can be a self-reinforcing mechanism," Wachter says.

An out-of-control price collapse would have dire consequences, Baker says. Even the most conservative banks would find themselves carrying portfolios of toxic mortgage loans.

If housing prices don't stabilize at traditional levels, financial troubles could spread everywhere — to credit cards, car loans and commercial mortgages, Baker says. "The waves of bad debt will just keep coming," he says.

The push is on to inspire developing countries to do what more American communities are doing: steer away from sprawling, cookie-cutter subdivisions popularized after World War II and create sustainable communities that will not deplete natural resources.

That includes developments built around mass-transit stations to reduce reliance on cars and projects that mix homes and businesses so that people can walk from home to stores and other services.

The first true suburb was born in the 1830s outside Manchester, England, Lang says. It was Victoria Park, a gated community of luxury homes that now is part of Manchester. About 20 years later came the first U.S. suburb — gated Llewellyn Park in West Orange, N.J., about 12 miles from Manhattan. Streetcar suburbs followed, first along the route of horse-drawn streetcars and later along rail corridors such as Philadelphia's Main Line.

After World War I, pedestrian-oriented suburbs flourished, including the Country Club Plaza district in Kansas City and Beverly Hills. Suburban expansion came to a standstill during the Great Depression and "the great burst comes after World War II," Lang says.

Tract-style subdivisions dependent on the automobile flourished. The most famous is Levittown, on New York's Long Island. Then came larger, 1960s-era split-levels and colonials on cul-de-sacs.

Within 20 years, suburbs exploded in the booming Sun Belt around Dallas, Atlanta, Phoenix and other fast-growing cities.

Then the craze for large luxury homes — dubbed McMansions — pushed development to the farthest fringes of metropolitan areas, where land was still cheap and plentiful. That helped spark an anti-sprawl fervor still alive today that has the backing of many environmentalists, preservationists, health professionals, farmers and big-city mayors.

Suburban sensibilities began to change.

Town centers designed to mimic small cities sprouted in suburbia. New light-rail lines were built and transit-oriented developments along the tracks followed. More people embraced "new urbanism," a movement that strives to capture the essence of turn-of-the-century communities. Central cities enjoyed a renaissance as young professionals and empty-nesters embraced the urban lifestyle.

Today, the dialogue about suburbs among urban thinkers around the world is intensifying largely because of universal concern over global warming. There is worry about traffic congestion and air pollution. That's why designing suburbs that require residents to drive to get anywhere is losing relevance.

For many developing nations, however, the suburban ideal is stuck in circa 1980: a sea of lookalike single-family homes and shopping malls on the edge of the city. It's a model that many Americans increasingly are rejecting.

"Most intellectuals say it's horrible. Most environmentalists say the same thing," says Nora Libertun de Duren, urban planning professor at Columbia University and an expert on suburbs in developing countries. "But developers say it's good business, and architects say it's good business."

China, where major cities are choking on stifling pollution, is striving to build the world's first sustainable city — Dongtan, which broke ground last summer. Designed by a London-based global consulting company and built on an island outside Shanghai, Dongtan, ultimately to house 50,000, will ban cars that pollute (even hybrids), grow its own food, recycle almost everything — including wastewater — and create its own energy from wind, the sun and human and animal waste.

"The Chinese are very interested in doing the latest and most interesting things," says Paul Lukez, an architect from Somerville, Mass., and author of Suburban Transformations. "There's a recognition by the government that something needs to be done. … If something is cutting edge, whether it comes from the United States or Europe, they want it."