A Nation of Renters Does Not Spend on the Nest

The Fiscal Times, here, tries to put a pretty face on the current economic situation in "Real Recovery: America's Debt is on the Decline," but the underlying facts show, as the article concludes, that there is no driver for jobs and thus nothing driving increases in real income, without which prospects for growth going forward are poor:

[A] new report from the McKinsey Global Institute says U.S. consumers are unlikely to assume their historic posture as spender of last resort for the global economy. ...

The lingering impact of the Great Recession is turning America into a “renter nation,” and that will have major implications for the rest of the economy over the next few years. ...

U.S. households have reduced their debt-to-disposable-income ratio by 15 percentage points to about 110 percent, which is a greater reduction than any of the ten largest industrial economies over the last four years. ...

The $150 billion in reduced mortgage debt – deleveraging – was more than offset by the $170 billion in new consumer credit. ...

[M]uch of the reduced mortgage debt is due to banks foreclosing on properties and writing off loans, not people paying off debts.


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