Who Committed Excess Borrowing?

With a hat tip to Rebecca’s post below, normalized borrowing growth in several sectors over the past 25 years. (Source: FRB Flow of Funds data)

Yes, there are three very similar (shades of blue) lines—but they are all household and non-profit data. (The growth in “credit market instruments” is, presumably, primarily driven by the non-profit sector.)

Note also—as Rusty would certainly tell you if I didn’t—that borrowing in the non-financial sector (the red line) has the flatest line of all (it’s at the top through the early 1990s and near the bottom as of last year.

Compare this with Mike Konczal’s graphic of corporate profit shares over the same period (h/t Brad DeLong) and there is a fairly clear case that accusations from bankers that consumers are suffering because of their foolish, excessive borrowing is a case of a very grimy pot talking to a copper kettle.