Deleveraging is over

An unsustainable run-up in consumer housing debt and other debt was a fundamental structural cause of the 2008 global financial crisis. Following four years of painfully slow decline, total U.S. consumer debt has now risen back above its 2008 peak, with the growth led by student loan and auto loan debt. Mortgages outstanding are not quite at their 2008 levels, but student loan and auto loan growth more than makes up for the modest home loan deleveraging. Americans are back up to their eyeballs in debt, but now some of the debt burden has shifted from baby boomers to millennials. While the cost of health care may be a key electoral issue for the over-50 crowd, under-40s will be listening for policymakers to offer solutions on student loans.