Chill out about the debt bubble? Not yet.
Gavin Kelly
This post originally appeared on Gavin's New Statesman blog
What role did high levels of household debt play in generating the crash and what do they mean for our economy over the next few years?
Well-worn questions, you might think. And no shortage of people have asserted answers. Following 2008, a whole new crunch-lit genre of books emerged to explore this. There is – or perhaps, was – something of a post-crash orthodoxy that the rise of easy credit, fuelled by run-away rewards for the super rich, and a squeeze elsewhere, encouraged ever greater borrowing.
A favoured narrative, often echoed by the coalition, is that debt ballooned as consumers (and home buyers) went on an irresponsible binge – it was all demand-led. Others argue, particularly in the US, that exploding debt reflects an act of policy – whether explicit or implicit – to increase the supply of easy credit for low and middle income groups who were seeing their wages stagnate. From this perspective, it was less a story of families living beyond their means and more about coping when their means stopped growing.
'Annual Survey of Hours and Earnings' 'earnings squeeze' 'squeeze' 'wage stagnation' #ows £10000 10p 2011 2012 50p 99% Affordable Housing Alex Hurrell America andrew haldane Anna Vignoles apprenticeships arrears ASHE assets Audit Australia autumn statement bank of england below minimum wage benefits borgen Boris Johnson borrowing budget budget 2011 Budget 2012 cameron care assistant centreforum child benefit child poverty childcar childcare CiF citizens UK coalition Commission Commission on Living Standards conservatives cost of living Cost of Motherhood costs council tax council tax benefit cpi CPIH daniel chandler datablog David Cameron david willetts de-coupling Debt debt forgivenes debt target degree dependency dilnot distribution Donald Hirsch earnings economy Ed Miliband education employment enforcement equity release felicity dennistoun female employment first-time buyers forbearance gap Gavin Kelly GDP gearing gender generation rent gingerbread giselle cory good life great stagnation gregg growth growth without gain Guardian HELP Committee higher rate higher rate tax relief hmrc holmes hourglass household debt household finances household income household spending Housing housing market huffington post IFS illegal in work income income inequality income tax increase indignados inequality inflation institutional investment interest rates international ippr Ipsos MORI James Plunkett jared bernstein jobs jobs gap joe coward John Van Reenen jrf Labour labour market lane kenworthy lee savage Left Foot Forward Lib Dems liberal democrats living living costs living standards living wage living wage foundation LMIs Low earners low middle earners low pay Low Pay Britain low pay commission low to middle income low wage low wage work machin marginal tax rate matt whittaker matthew hancock Matthew Whittaker mayhew measuring poverty median real wage median wage Mervyn King middle class minimum income standards minimum wage missing out mobility monetary policy Montague mortgage market mortgages netmums new statesman new statesman blog new year newby newham Nick Clegg niesr number paid below minimum wage Obama OBR occupy occupy wall street OECD older older workers ons pay pay and pensions pension Pensions pensions relief personal allowances personal finance pledge cards polarisation policy politicans politics poll poverty predistribution prescription charges prices priorities private rented sector private sector growth prospect public sector public services q2 growth recession recovery reduce credit card reform regional Rented Sector resolution foudnation Resolution Foundation retirement robin wales routine jobs rpi RPIJ rss savings Senate shereen hussein skills social social care social housing social mobility social mobility foundation society Sophia Parker southern cross Squeezed Britain Squeezed Middle standards state state pension age sutton trust tax tax and benefit changes tax and benefits Tax Benefits tax changes tax credits tax cuts tax relief The Spirit Level think tank think-tank threshold travel time trends uk underemployment unemployment unison Universal Credit university USA van reenen VAT Vidhya Alakeson voters voting wage wage growth wage inequality Wage squeeze 2013 wages welfare Welfare Debate welfare state White Paper women Work work incentives workers Working part time lower skilled job working poor young people Youth unemployment youth wages zero hours
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