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WASHINGTON (MarketWatch) — Everyone knows America has too much debt. What they don’t know is that things are getting better, not worse. Little by little, our economy is reducing its debt burden, slowly repairing the damage caused by 10, 20 or 30 years of excess. If you want to know why economic growth has been so tepid, here’s your answer. Four years after the storm hit, the economy is still deleveraging. And it’s very hard for any economy to grow when everyone is focused on increasing their savings.

Here's The #1 Threat To The Economy At Least Until 2012 Joe Weisenthal Sep. 9, 2010, 6:30 AM Image: Deutsche BankDeleveraging.You've heard this term a lot because it's a huge deal, and the fact that households are still deeply in debt (though not as bad as they were two years ago) is a major drag on consumer spending. In a new report from Deutsche Bank's Peter Hooper and Torsten Slok, this issue is examined more deeply -- how much deleveraging has been done, why it's ongoing, and how much more there is. Their conclusion -- yes, we've already made substantial...

Roubini: Don't Fear Double Dip, It's Already Here Thursday, July 22, 2010 09:40 AM By: Julie Crawshaw Economist Nouriel Roubini says the much feared double-dip recession has already arrived. "Whatever letter of the alphabet U.S. economic performance ultimately resembles, what is coming will feel like a recession," Roubini writes on project-syndicate,org. "Mediocre job creation and a further rise in unemployment, larger cyclical budget deficits, a fresh fall in home prices, larger losses by banks on mortgages, consumer credit, and other loans, and the risk that Congress will adopt protectionist measures against China will see to that." At best, Roubini says,...

US debt contracts for first time in decades GARETH COSTA, The West Australian September 26, 2009, 4:08 pm A number like $US122 billion ($140 billion) appears insignificant when related to the trillion dollar problems in the US economy, but when it represents the first contraction of gross US debt in decades the implication for global recovery is daunting. Total US debt, that includes bond debt issued for the bailout packages, fell in the second quarter of this year after continuing to expand right through the global financial crisis, according to data released by the US Federal Reserve Board. US federal,...

Deleveraging the U.S. Economy August 06, 2009 We are in the process of deleveraging the most leveraged economy in history. Many investors look at this deleveraging as a positive for the United States. We, on the other hand, look at this deleveraging as a major negative that will weigh on the economy for years to come and we could wind up with a lost couple of decades just as Japan experienced over the past 20 years. It is true that Japan didn't act as quickly as we did but our debt ratio presently is much worse than Japan's debt ratios...

Debtwatch 36 July 2009: It’s the Deleveraging, Stupid Published in July 4th, 2009 Posted by Cassander in Debtwatch, USA Steve Keen’s Debtwatch No. 36 July 2009 “Gentleman, you have come sixty days too late. The depression is over.” – Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930 “The past may not repeat itself, but it sure does rhyme” Mark Twain In the last six months, the phrase “Green Shoots of Recovery” has entered the economic lexicon. It appeared to some observers that the global recession was coming to an end,...

Insight: Recovery not as easy as U, V, W By Gillian Tett Published: May 28 2009 20:09 | Last updated: May 28 2009 20:09 Are you expecting a “V” shaped recovery this summer? Or do you anticipate a scenario more like a “U” or a “W”? That is the question I have been asked repeatedly this month, as the debate about “green shoots” roars on. Personally, though, I suspect that none of the letters in the Roman alphabet quite captures what is most likely to go on. To be sure, the last year might seem to correspond to the start...

The Act of Rebalancing Is About To Get Real Nasty For Export-Model And Oil Exporter Countries … My outlook for 2009 is this: The U.S. economy could get a lot uglier. But the pain of rebalancing will be even more severe in Europe, Asia, and Latin America. And it will hit those economies a whole lot harder than is now priced into the market. _ In short, the U.S. isn't recycling excess savings from China and oil exporters any longer because China's exports and oil prices have plummeted._ U.S. consumers are starting to save again. And this has reduced spending...

The Problem With Deleveraging By John Mauldin - November 8th, 2008, 8:03AM November 7, 2008 By John Mauldin In general, we consider it a good thing to save money and to “owe no man anything save love.” But what happens when a debt-happy society wakes up and decides that saving is a good thing for everybody? What happens when banks and hedge funds decide (or are forced) to reduce their debt? What happens when businesses of all sizes find it harder to get loans to operate? In this week’s letter we discuss “The Great Unwind,” that process of deleveraging that...

or those who still care or remember, I was writing repeatedly in the late spring and early summer about the vicious impacts of the Crack Up Boom (CUB) Bubble on Joe Ultra Light Sixpack. It was my contention that the CUB would reach an unsustainable point, and then crash and burn. However now that it has burned, there are several positive impacts from this in the long term. First, the “take these dice from my cold dead hands” Berserkers are dead and buried. This would include hedge funds, reckless lenders and associated Pig Men. The policy makers responsible will be...

DeleveragingA fate worse than debt Sep 25th 2008 /snip IT IS ugly, but deleveraging is the word of the moment. Financial institutions, desperate to repair the damage inflicted on their balance-sheets by mortgage-related securities, sell assets. In doing so, they exacerbate the problem. Forced sales push down the prices of assets, worsening the balance-sheets of other investors, forcing more asset sales, and so on. In the end, the government is the only entity left in the game with a balance-sheet strong enough to keep buying. The Bush administration’s bail-out plan, even if it gets through Congress, may not be the...

FIG business drives investment banks Total global investment banking revenues for the year to last Friday were $25.7bn (€16.3bn), with $10.8bn from the financial institution group business. Over the same period last year FIG accounted for 31% of global investment banking revenues at $12.7bn. Huw van Steenis, head of banks and financials research in the Europe, Middle East and Africa region at Morgan Stanley in London, said: “Given deleveraging is a multi-year process, we think the opportunities from FIG funding, asset disposals and M&A will provide a very rich seam for at least two years.”