Is household debt driving the US recovery?

This is a quick hit but I think something to watch. You saw the blurb from Reuters in today's links on how US consumer debt surged higher for the first time since the financial crisis. My thesis has been that consumers only retrench when forced to because of their 'uncreditworthiness'. I like to say that deleveraging in balance sheet recessions happens largely during recessions. And I think of 'uncreditworthiness' as consumers either actively declining credit in order to pare down debt or being declined by banks as uncreditworthy.

There are certainly supply constraints when the business cycle is at its nadir. However, at this point in the business cycle, i.e. in the third year after recession has supposedly ended and after FDIC-insured US banks have started earning tens of billions each...


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