And the dearth of debt capital extends far beyond real estate; the lack of business growth has far greater implications for the economy. Some 80% of US products are outsourced, which means that business is taken out of the country. But banks aren’t lending to small businesses either. “We need new business, which can happen only with capital from the banking industry,” he said.

On a macro level, however, the greater issue is the record level of debt the US carries and the federal deficit, said Tate. His warnings were dire: “If America doesn’t get in control of its debt in the foreseeable future, America as you know it will cease to exist.”

The weak US dollar in particular is a greater problem than many believe. “If the US dollar is no longer used as the standard of currency for the world, we will lose our standing as a world superpower,” he stated.

But what’s needed isn’t a complete overhaul; in fact the US system works well. “The capitalist system is what made the US great,” said Tate. “If we change that system to one that hasn’t been successful anywhere else in the world, it will be the biggest mistake.”

The solution, or at least a first step toward a solution, is to recognize the severity of the problem. “Without a recognition of the problem, there will be no cure. The politicians, the people who control our destinies, don’t understand how serious the problem is,” he said. “I believe it’s curable, but we have to recognize the sacrifices that’ll be necessary, and there will be people who will be unhappy because we took away things that they think they’re entitled to.”

Tate stressed that real estate is a great industry, with significant rewards for those that do well. In fact, those benefiting from this downturn are actually helping the market by generating business. But it isn’t enough to just make deals—industry participants must be part of the effort to educate decision makers on the key issues. Tate stressed: “I’m proud to be an American, but I don’t want to see America destroyed by Americans. Because no one can do to the US what we’re doing to ourselves.”

Later in the day, the summit featured a Legislative Outlook session, with key speaker Jeffrey D. DeBoer. The president and CEO of the Real Estate Roundtable gave an update on the political climate in Washington, DC, given the new Congress and regulatory changes on the state and federal level, and he discussed the legislative issues expected to impact the industry.

Speaking bluntly, DeBoer stated that the issues that “really matter,” major concerns such as the federal deficit and balancing the budget, will not get resolved soon, but rather will be discussed on the Hill for several more months. But, he noted, the rhetoric has changed, in that politicians now seem to understand the intricacies and implications of things like carried interest and spurring business growth. “The number-one problem of all, though, is jobs,” he stressed. “If we get job growth, then all the other issues can be addressed.”

In terms of commercial real estate, what’s on DeBoer’s mind is the levels of maturing debt in the market. About 70% of the $1.4 trillion in maturing debt is in CMBS, and it’s estimated that $1 trillion in equity will be necessary for that debt to be refinanced, he pointed out.

“Where is that equity going to come from?” DeBoer asked. One major source could be foreign investors, but US laws such as FIRPTA place what’s essentially a tariff on foreign investors’ US real estate investments. “I don’t get why we can’t adjust policy that will help American business. And it will only help banks, which are the ones holding these assets."

DeBoer related that RER and industry leaders are working on policy changes that would allow foreign players to invest in real estate the same way as REITs, along with other laws that would make investment friendlier and more attractive to foreign investors.