Debt and the Great Recession

The Great American Recession resulted in the loss of eight million jobs between 2007 and 2009, and more than four million homes were lost to foreclosures. Is it a coincidence that there was a dramatic rise in household debt in the years before the recession—that the total amount of debt for American households doubled between 2000 and 2007 to $14 trillion? Definitely not, says Atif Mian. In House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again, Mian and co-author Amir Sufi explain how the Great Recession and Great Depression, as well as the current economic malaise in Europe, were caused by a large run-up in household debt followed by a large drop in household spending.