Skip to content
Subscriber Only
Opinion
Barry Ritholtz

Seeing a Debt Crisis That Isn't Really There

Yes, household borrowing has topped the old record reached right before the financial crisis. But that doesn't mean a meltdown is coming.
Relax.

Relax.

Photographer: Chris Jackson/Getty Images

For the first time since the financial crisis, household debt levels in the U.S. have surged past old records. As the Federal Reserve Bank of New York reported, total household debt stood at $12.73 trillion as of March 31, a $149 billion increase, or 1.2 percent, from the fourth quarter of 2016. That put overall household debt $50 billion higher than its previous peak in the third quarter of 2008.  

A quick review of related headlines suggests calamity is nigh: "Household debt is dangerously close to 2008 levels," according to CNN. The New York Times ominously reported that borrowing had reached levels not seen since "2008, just as the global financial system began to collapse." The record debt risks "exposing some categories of borrowers to financial strain as they try to keep up with their obligations," the Financial Times intoned.