The Depressing Foundation Of US Economic Growth

Atif Mian and Amir Sufi at House of Debt post what is one of the more depressing carts we've seen in awhile: They posit that the one thing that really fuels spending in the US is subprime lending.

When subprime mortgage lending was all the rage, spending on home-related times boomed.

Now that subprime auto lending is a thing, car sales are going crazy, while spending on housing-related goods remains rather muted.

The implication is that the marginal driver of spending is the mass of consumers for whom the only real source of buying power is credit, rather than, say, employment or wage growth.