Tuesday, February 03, 2009
"I have no basis for this opinion, but it's the other side that practices faith-based economics"
Consumers are pulling back because they�ve realized that they�re too far in debt. The economy is shrinking in large part because consumers are pulling back. And the result, almost surely, is to leave household balance sheets worse than ever. I can�t do this accurately until the Federal Reserve�s flow of funds data have been updated, but almost without question the ratio of household debt to personal income has been rising, not falling, as consumers try to save more.I guess winning a Nobel means never having to wait for data. Or maybe it's the water. (Emphasis mine)
Labels: economics
