We are likely only beginning to see the serious costs of the foreclosures that have already been initiated, both because of the often-substantial amount of time required to complete a foreclosure and because the costs likely compound as the number of foreclosures grows larger.
However, forecasts by private-sector economists have fluctuated greatly since the beginning of 2010.8 The divergent views regarding the outlook have probably been caused by differing opinions regarding the time it will take to resolve the balance-sheet problems. A risk common to many advanced economies is the sharp growth in public debt.