Washington’s Literal Sinkhole, and Our Idiotic Fixation on Deficits

[Yo_Mama]

4. We are in a recovery, just a very flat one

But this is due to many factors - the holdover from the massive debt accumulation is one of them:

From 1999 to 2009, the amount of home mortgages outstanding rose more than 150%.

In the meantime, per capita incomes couldn't keep pace, nor are they per capita incomes are not recovering as they normally would in an expansion:


In the meantime, the younger would-be home buyers have disproportionate amounts of debt. The increase in consumer credit seen here is mostly student loans:


Demographics of the US population are also a factor. As people move into their 50s, they naturally seek to pay off debt and plan for retirements. It makes sense that many would raise savings rates:



The construction industry will never recover to its pre-recession point (pop-adjusted), because we had a huge RE bubble:


All of that having been conceded, still this is a recovery:

Although there's a problem with hires:


But among the factors holding it back are reasonably high rates of indebtedness among nonfinancial companies, which really have most of the jobs:


Very high indebtedness of state and local governments:

Which grew very disproportionately to their receipts:


Along with a very high rate of federal government indebtedness:


Debt is constraining growth right across the board, and state and local governments are in the worst fix - and they are not able to raise taxes to redress the imbalance.