Despite the fact that overwhelming debt is held across the board and paying it down - deleveraging - seems to be necessary, doing so quickly can create problems (like further stalling a recovering economy) since it involves not spending the money needed to keep the economy afloat.
Here's back and forth on the subject:
- Is Focusing on Deleveraging a Useless Distraction?
- Deleveraging and monetary policy.
- Delevering.
- Three Ways of Looking as Deleveraging and Monetary Policy.
- You ain't seen nothing yet.
