The Dallas Fed just published an analysis of recovery from the current housing bubble. In the very first paragraph there is this:
9.1 million homes were built between 2002 and 2006, a period when 5.6 million U.S. households were formed.If that doesn't jump out and shake you then nothing will. This report goes on to discuss how there can't be a "soft landing" from the housing bubble. There isn't enough money in the world to muffle the bursting bubble.
Capitalism is awesome, because it allows for the most rational and highest uses of resources to create wealth. It is also, unfortunately, subject to painful corrections, but those are the times when resources are getting re-allocated so that there can be a recovery. Like ripping off a band-aid, it hurts like crazy when you do it, but it is over faster and the recovery can begin in earnest. Programs to mitigate the pain, while comforting in the short run, are really just a waste of time and money. Kindness can kill us all.