Households Un-borrowed $261 Billion Last Quarter

A blog about business and economics.
Dec. 6 2012 12:27 PM

Households Un-borrowed $261 Billion Last Quarter

1354814831521

The Federal Reserve is out with its latest Flow of Funds report and it shows that deleveraging was hot for households in the third quarter. Households didn't just borrow less money than they did in the second quarter, they un-borrowed money. 

The federal government, meanwhile, is still borrowing a ton. But it, too, is deleveraging. That $690 billion is down from $1.2 trillion in the second quarter, which was down from $1.4 trillion in the first quarter. In Q3 of 2011, the federal government borrowed $1.3 trillion. Everyone in DC is supposed to be alarmed by all that borrowing, but for households to engage in this savings behavior somebody has to borrow money from them. And the federal government can right now borrow money for super-cheap. Under the circumstances, levvying taxes on households (reducing their incomes and hurting the macro-economy on both the supply and the demand side) in order to reduce federal borrowing is truly perverse. We desperately need to save the payroll tax holiday.

Advertisement


Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Foreigners

The World’s Politest Protesters

The Occupy Central demonstrators are courteous. That’s actually what makes them so dangerous.

The Religious Right Is Not Happy With Republicans  

The XX Factor
Oct. 1 2014 4:58 PM The Religious Right Is Not Happy With Republicans  

The Feds Have Declared War on Encryption—and the New Privacy Measures From Apple and Google

The One Fact About Ebola That Should Calm You

It spreads slowly.

These “Dark” Lego Masterpieces Are Delightful and Evocative

Crime

Operation Backbone

How White Boy Rick, a legendary Detroit cocaine dealer, helped the FBI uncover brazen police corruption.

Politics

Talking White

Black people’s disdain for “proper English” and academic achievement is a myth.

Activists Are Trying to Save an Iranian Woman Sentenced to Death for Killing Her Alleged Rapist

Piper Kerman on Why She Dressed Like a Hitchcock Heroine for Her Prison Sentencing

  News & Politics
Politics
Oct. 1 2014 7:26 PM Talking White Black people’s disdain for “proper English” and academic achievement is a myth.
  Business
Moneybox
Oct. 1 2014 2:16 PM Wall Street Tackles Chat Services, Shies Away From Diversity Issues 
  Life
Outward
Oct. 1 2014 6:02 PM Facebook Relaxes Its “Real Name” Policy; Drag Queens Celebrate
  Double X
The XX Factor
Oct. 1 2014 5:11 PM Celebrity Feminist Identification Has Reached Peak Meaninglessness
  Slate Plus
Behind the Scenes
Oct. 1 2014 3:24 PM Revelry (and Business) at Mohonk Photos and highlights from Slate’s annual retreat.
  Arts
Brow Beat
Oct. 1 2014 9:39 PM Tom Cruise Dies Over and Over Again in This Edge of Tomorrow Supercut
  Technology
Future Tense
Oct. 1 2014 6:59 PM EU’s Next Digital Commissioner Thinks Keeping Nude Celeb Photos in the Cloud Is “Stupid”
  Health & Science
Science
Oct. 1 2014 4:03 PM Does the Earth Really Have a “Hum”? Yes, but probably not the one you’re thinking.
  Sports
Sports Nut
Oct. 1 2014 5:19 PM Bunt-a-Palooza! How bad was the Kansas City Royals’ bunt-all-the-time strategy in the American League wild-card game?