Chart of the Day
Posted at 9:30 a.m. on Dec. 7, 2012
– Matthew Yglesias used the latest “Flow of Funds” data from the Federal Reserve to demonstrate the tremendous deleveraging currently taking place among US households.
“Households didn’t just borrow less money than they did in the second quarter, they un-borrowed money. The federal government, meanwhile, is still borrowing a ton. But it, too, is deleveraging. That $690 billion is down from $1.2 trillion in the second quarter… but for households to engage in this savings behavior somebody has to borrow money from them. And the federal government can right now borrow money for super-cheap.”