Everyone has an opinion about whether the economic stimulus package is too big or too small, but he's an opinion worth listening to: Robert Shiller.

As one of the few people to publicly call the internet and real estate bubbles for what they were, he has more credibility than just about anyone. And he's saying the stimulus package is too small and we need more if we are to avert another depression.

In an op-ed piece for Bloomberg, Shiller writes that "In the face of a similar Depression-era psychology today, we are in need of massive pump-priming again. We appear to be in a much better situation due to the stronger efforts to date. Still, there is a danger that, because of a combination of faulty economic theory and inadequate appreciation of human psychology, as well as deep public anger, we will not continue with such stimulus on a high enough level."

Irrational Exuberance author Robert Shiller thinks housing is bad (Anyone disagree?) and also thinks that the government isn't doing enough to help people keep their homes: "We have to consider the possibility that the housing price downturn will eventually be as big as that of the last truly big decline, from 1925 to 1933, when prices fell by a total of 30 percent."

Few experts whose opinions are as highly valued as Shiller have suggested such a possibility, and it's worth thinking about the catastrophic consequences that could ensue. On average, homes are only down 5% from their peak -- Shiller is suggesting that we could only be 1/6th of the way through the crisis, in spite of all the hand wringing that has already taken place.

After referring to the broad initiatives that President Roosevelt and others initiated during the Depression, Shiller describes the public policy response to the current crisis as "anemic".

He may be right. But the other side to it is this: The subprime mortgages that are wreaking such havoc enabled a lot of people to acquire homes who had no business owning their own homes. Many had terrible credit, consumer debt, and didn't make substantial down payments. Mortgage fraud was a rampant means of getting homes for lower-income workers, often on the part of mortgage brokers.

Everyone talks about people losing homes like it's this horrible thing -- which it is. But during the housing bubble, homeownership became a reality for millions of people who never would have had that opportunity a few decades ago. An increased foreclosure rate is probably a natural and necessary part of increased homeownership among lower income people, and a broad public policy response may not be appropriate.

Yesterday, Robert Shiller of MacroMarkets said "the pullback in the US residential real estate market is showing no signs of slowing down." This followed the S&P/Case-Shiller national home price index falling 0.9% sequentially in the second quarter.

The index is down 3.2% from the second quarter of last year and is at its lowest level since it began in 1987. Robert Shiller went on to say he is worried about your home's value, and that's not good.

As a reminder, Shiller, of Yale professorial claim, correctly called the excesses of the late 1990's stock market. However, while he called the top, he never called the bottom, staying with his bearish bias way too long and never becoming a buyer.

Shiller shifted his focus to real estate in the current decade. Once again, his bearish prognostications proved correct. However, as the real estate market becomes weaker and weaker with the media flocking to his doors, the trained economist appears to be focused on following the downward trend and not attempting to find a point to start bottom fishing.

A new contrarian indicator may be when Shiller hits the airwaves in full force with his bearish views, it could prove to be a good sign that the bottom for the bear market in real estate is near.