Household Balance Sheets Are Getting Better

We are recovering from a balance sheet recession.  The good news is that household debt has been steadily deleveraging during the recovery.  That slows down economic growth but it also paves the way for a return to full employment.  It would have been better if fiscal policy had compensated for the decline in private spending as household and private industry cut back on spending.  The GOP, however, did everything that it could to prevent that from happening.  They understood that their opposition to fiscal policy would slow the recovery and give them a better chance for victory in 2012.