Walter Russell Mead is the Henry Kissinger senior fellow for US foreign policy at the Council on Foreign Relations and author of Special Providence: American Foreign Policy and How It Changed the World. He also writes a blog for the American Interest.

The news from the housing market this week is bad.  Really bad.  House prices today are lower in most of the country than they were in the dismal month of April 2009; we are now in the second dip of the double dip housing downturn.

This doesn’t just mean that President Obama’s re-election is in trouble.  It doesn’t just mean that stocks and the dollar may fall.  It doesn’t just mean that unemployment will stay high for a while and that whole economy may follow the housing market back into the tank for a second recession.

It means something bigger.  For eighty years we have defined the American dream as an owner occupied family home, preferably with a nice swathe of crabgrass-free lawn around it.  The home mortgage was the centerpiece of a society of consumers based on debt-financed living.  It was life on the installment plan.  The latest downturn in the housing market is one more grim signal that in its current form, the American Dream is going the way of the dodo....

The bad news has come at a bad time.  The Baby Boomers, the least provident and most demanding generation in American history, are beginning to hit retirement.  For decades, many Boomers comforted themselves with the illusion owning a home would provide them with the savings they would need in retirement.  Now many of them haven’t paid off their mortgages and they not only don’t have a lot of equity left; in some cases cannot afford to sell their depreciated homes....

Humpty Dumpty has fallen off the wall.  A social ideal has received a irrecoverable blow and the era of consuming our way to prosperity is drawing to a close.  The country has maxed out its credit cards, and we are going to have to live within our means....