As stated by Tim Rood, housing sales account for 20-30% of the National Economy. If the banks react to the Federal Government’s lawsuits with tightening loan requirements even more than they already have, then we should expect to see a further decline in home sales. Such an outcome will undoubtedly prolong what is considered a slow economic recovery.

Reasoning/Fallacy: This also appears to be an Argument from Sign. The general wisdom of this argument is simple. A successful outcome in favor of the government will result in fewer loans being granted by the banks. If this scenario is proven to be correct, then potential homebuyers will not be able to secure the loans needed to purchase homes. The United States is already experiencing a decline in home sales due to the tighter loan restrictions implemented by lenders in the wake of the collapse of the housing market in 2008.