Despite stories about consumer savings on the rise, the nation’s total indebtedness has also continued to rise, as have some measures of consumer debt. Gross points out that any decline in personal debt is “driven less by Americans giving up on credit cards than on credit card issuers giving up on Americans.” Lenders are writing off some debt as uncollectable. Still, the recovery is maturing, powered not merely by government stimulus and business investment, but also by increasing total consumer credit. This will be the root of our short-term salvation from the recession.
Gross, author of “Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation”, is the economics editor and columnist at Yahoo! Finance.