by BCA Research
Financial Sense
Was the financial crisis a watershed event that marked a structural shift in attitudes toward debt?
[…] History suggests that major credit busts trigger lasting shifts in credit behavior. The chart above shows that US consumers have become much more focused on saving since the financial crisis.
The Great Depression was a more traumatic event than the recent downturn. Nevertheless, it is interesting to note that nominal growth in US private debt turned negative in 1931 and did not move sustainably into positive territory until 1947. In real terms, the level of private debt did not reach a new peak until the mid-1950s. Anecdotal evidence indicates that many of those who experienced the Depression retained a strong aversion to debt for the rest of their lives.