Debt is expanding year over year at a rate 33% faster than compared to the previous period, but even so, CNBC's Jeff Cox here is exaggerating the significance:
"Whether it's corporate loans, all quality levels of bonds or simple consumer credit, the debt party is back on in the U.S., whether it's in the boardroom or the living room."
Debt expansion between April 2012 and April 2013 is up at a rate of only 3.5% compared to the period a year earlier when total credit market debt outstanding (TCMDO) expanded at a 2.6% rate.
TCMDO increased from $55.592 trillion in April 2012 to $57.563 trillion in April 2013, the latest date for which figures are available. In April 2011, TCMDO stood at $54.150 trillion.
As welcome as the present higher rate of debt expansion might be from a monetarist perspective, it's still a far cry from the historic post-war pattern which has witnessed TCMDO double every 6-11 years, with an average doubling time of 8 years.
A doubling time of 11 years implies an annual rate of debt expansion of about 6.5%, not quite double the actual rate in the last year. At the present rate, it will take TCMDO 20 years to double, an unprecedented slowdown in the pattern since the end of World War II.
The United States remains severely hampered when it comes to its traditional post-war debt-based economy.
