M1 money supply has gone up about $1 trillion between mid-2008 and now, almost 5 years. This is basically spending money which is not being spent.
Total credit market debt fell an equivalent amount, but all of it in 2009, so one cannot say the one "offset" the other. (The extra M1 was saved over the nearly five year period. The debt was discharged somehow, through pay-downs or defaults, and relatively quickly during the year of the biggest GDP decline in post-war memory). And since early 2010, total debt is back up over $2.5 trillion. And since 2008 TCMDO is up over $3.6 trillion overall.
Somebody is ramping up debt just like before the crisis, but it's not the consumer.
Somebody is ramping up debt just like before the crisis, but it's not the consumer.
