“There has been much discussion about income inequality, but not enough focus on its corollary: debt inequality. As real wages for the masses decline, they try to sustain consumption through borrowing from the wealthy. This economic model is, of course, unsustainable, and eventually collapses, as we discovered in 1929 and again in 2007. Unfortunately, our tepid recovery continues to rely primarily on asset inflation and cheap credit to support economic growth, even as real income for most people erodes, likely setting us up for another bust down the road.”
