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Household financial burdens have collapsed

The data for this chart comes from the Fed and runs through the end of last year. The message is strong: as a result of deleveraging (some of it forced by defaults), refinancing, very low interest rates, and rising incomes, household financial burdens (payments as a % of disposable income) are now as low as at any time in the past 30 years. This is a direct reflection of the accumulation of all sorts of big adjustments that have been made in the wake of the 2008 financial crisis and the Great Recession. This also reflects the dynamism of the U.S. economy: when faced with great adversity, great adjustments are made, and these adjustments in turn prepare the economy for renewed growth.

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