Household debt is at an all-time high. The Federal Reserve Bank of New York explains:
Total household debt increased by $219 billion (1.6%) to $13.51 trillion in the third quarter of 2018. It was the 17th consecutive quarter with an increase and the total is now $837 billion higher than the previous peak of $12.68 trillion in the third quarter of 2008.
CNBC notes that corporate debt has risen from $4.9 trillion in 2007 to nearly $9.1 trillion in 2018. CNBC also points out: “The cash-to-debt ration for corporate borrowers fell to 12 percent in 2017, the lowest ever.”
What does this mean for the economy?
While mainstream economists think that private debt has no effect on the economy, smarter economists – like Steve Keen and analysts at the National Bureau of Economic Research – point out that high levels of private debt are the MAIN predictor of deep recessions and depressions.