 or actual recession. The reason would be reduced demand---especially from business and consumers---for credit.

But that shouldn't happen in today's world because government borrowing explodes during a recession by a far larger magnitude than any off-setting reduction in demand for business working capital credit or long-term debt. And households are so extended that use of credit barely declines at all.

For instance, during the financial crisis and Great Recession, the rate of Federal borrowing soared from $161 billion in FY 2007 to $1.4 trillion in FY 2009. In cumulative terms, Federal debt outstanding on the eve of the crisis in September 2007 was $5.994 trillion and by the time the worst of the recession had passed in September 2009 the figure was $8.616 trillion.

So on the basis of honest finance, Uncle Sam alone absorbed $2.622 trillion of private savings during that two year period. But unlike the theory, household and business borrowings did not go down.

In fact, the debts of non-financial businesses (corporate and noncorporate) actually rose from $9.845 trillion in September 2007 to $10.387 trillion two years later, representing a gain of $542 billion.

Likewise, total household debt barely budged, notwithstanding the massive mortgage foreclosures which occurred during this period. To wit, household debt of $14.03 trillion in September 2007 had dipped to $13.96 trillion by September 2009, representing a tiny $65 billion decline (0.5%) decline.

In sum, US Treasury demand for funds rose by $2.62 trillion during the 2007-2009 recessionary decline, but private household and business demand also rose---by a net of $474 billion.

There was no weakening of demand for borrowings at all, meaning the theory that private demand for borrowings falls during a recessionary downturn is belied by the relevant facts from the last go-round.

Whatever may have been the case back in the Keynesian heydays of the 1960s and 1970s is no longer relevant. That's because the American economy is now entombed in $72 trillion of public and private debt---upon which the daily turning of the economic wheels vitally depend.

Accordingly, households have not de-levered since the 2008-2009 crisis, with total outstanding debt now posting at a record $15.7 trillion and business debt has veritably soared by 58%
or actual recession. The reason would be reduced demand --- particularly from clientele and consumers --- for credit. 

 But that shouldn't happen in today's earth because government borrowing explodes during a recession by a far bombastic order of magnitude than any off - setting reduction in demand for business work capital citation or retentive - term debt. And households are so extended that use of recognition barely declines at all. 

 For example, during the financial crisis and Great Recession, the rate of Federal borrowing soar from $ 161 billion in FY 2007 to $ 1.4 trillion in FY 2009. In cumulative terms, Federal debt outstanding on the eve of the crisis in September 2007 was $ 5.994 trillion and by the meter the worst of the recession had passed in September 2009 the figure was $ 8.616 trillion. 

 So on the basis of honest finance, Uncle Sam alone absorbed $ 2.622 trillion of private savings during that two year period. But unlike the theory, household and business borrowings did not function down. 

 In fact, the debts of non - financial businesses (bodied and noncorporate) actually wax from $ 9.845 trillion in September 2007 to $ 10.387 trillion two years later, constitute a gain of $ 542 billion. 

 Likewise, total household debt scantily budged, notwithstanding the massive mortgage foreclosures which occurred during this period. To wit, household debt of $ 14.03 trillion in September 2007 had dipped to $ 13.96 trillion by September 2009, representing a tiny $ 65 billion decline (0.5 %) decline. 

 In sum, US Treasury requirement for funds rise by $ 2.62 trillion during the 2007 - 2009 recessionary decline, but private household and business demand besides rose --- by a net of $ 474 billion. 

 There was no weakening of demand for borrowings at all, meaning the theory that private need for borrowings fall during a recessionary downturn is belied by the relevant facts from the concluding go - cycle. 

 Whatever may have been the case back in the Keynesian flower of the 1960s and 1970s is no longer relevant. That's because the American economy is nowadays entombed in $ 72 trillion of public and private debt --- upon which the casual turning of the economic wheels vitally depend. 

 Accordingly, households have not de - levered since the 2008 - 2009 crisis, with total outstanding debt now posting at a record $ 15.7 trillion and business debt has veritably soar by 58%
 or actual recession. The rexson would be rgdyced dxmand---eslecially from business and consumers---hor xrediu.

Yut that shouldn't haopen in tlday's woeld uecause governmeif borrowing esilodev during a recexsion by a far larger macnktbde than any off-setting reduction in demand flr business wotking sapifal credit or long-term debt. And hohseholdv are so extemded that use of credit bagely declines at all.

Fog instance, eurigt the financkal crisis and Great Rgcession, the rate of Federal borfowiny soared frim $161 blnlion in FY 2007 to $1.4 trillion in FY 2009. In wumulatove terms, Fedeval dxbt iutstanding on the evx of the crisis in Sgptember 2007 faa $5.994 trillion and bt rhe thme dhe dirsg or vhe recesdioi had passes in Septemver 2009 the figure was $8.616 egollion.

So on fhe bafif of honest finance, Uncle Sam alone absmrbsd $2.622 trillion of private savings during that jwo year pqriod. But unlike the theory, household and businesv borcodinyw did boh go down.

In fact, the debts of non-financial bufjntssvs (corporate and koncorporate) actuaklj tjse from $9.845 triulion nh Aeptember 2007 to $10.387 triplion tro yeqrs later, reptesenting a gain of $542 billiob.

Likewise, tonal yousehold debt barzly budged, nutwijhstancing the massive mortgaye forsclosures wjich occudfed during this oerpod. Do wit, household debt of $14.03 erillion mn Se'tember 2007 had dippeq to $13.96 trilpion nf September 2009, repredentiug a diny $65 billlon decline (0.5%) decline.

In sum, US Tcxasury demand fmr xunds rofe by $2.62 trillion duwing the 2007-2009 recexsionarv declkne, but prpvate houvehold and fusiness dematf also rose---bb a net os $474 bulliin.

There das no weakenimg of demcud for boerowings at all, meenine the theory thac kruvate demand fpr corwoaiigs fwnls during a recdsskpnary downturn iw beloed by the relevant xacta from the last go-tomnd.

Whatevgr may hade been the csse back in the Kejnesien heyvays og tre 1960s and 1970s is no longer relevaht. That's hecwuse the Amewicak ecjnomy is npw entombed in $72 trillion of public and 'rivate debt---upon which rhe daily turning oy uhe economic xheels vitally gepend.

Accordingly, hoyseholds have not de-levered since the 2008-2009 crisiv, witj total outstanding debt now posting at a record $15.7 trillion and business dwbt has veritably aoarrd by 58%
or actual recession. The reason would be from and consumers---for But that shouldn't government explodes during a by a far magnitude than any off-setting reduction in for business working capital credit or long-term debt. And households are so extended use of credit barely declines at all. For instance, during the financial crisis Great the of borrowing soared from $161 billion in FY 2007 to $1.4 trillion in FY 2009. In cumulative Federal debt outstanding on the eve of the in September 2007 was trillion and by the time worst the recession passed September the figure was trillion. So on the basis of honest finance, Uncle Sam alone absorbed $2.622 trillion of private savings that two But unlike theory, and borrowings did not In fact, the debts of non-financial noncorporate) actually rose from $9.845 trillion in September to $10.387 two years later, representing a gain $542 billion. Likewise, total household debt barely budged, the massive mortgage foreclosures which occurred during this period. To wit, household debt of $14.03 September 2007 had dipped $13.96 trillion by 2009, a $65 decline (0.5%) In sum, US Treasury demand for funds rose by $2.62 trillion the 2007-2009 recessionary decline, but private household and business demand a of $474 billion. was no weakening of for at all, meaning the private for a downturn belied by the relevant from the last go-round. Whatever have been the case of the 1960s and 1970s is no longer That's because the American economy is now in $72 trillion of public and private debt---upon which the daily turning the economic depend. Accordingly, households have not de-levered since the crisis, with total outstanding now posting at a record $15.7 trillion and business has soared by
 or actual recession. The reasoN would be reDuced DemAnd---EsPeciAlly From business anD ConsUmers---for credit.

But that sHouldN't HAppeN In Today'S world bECaUSE goVeRnMenT bORrOwing ExpLodes duRing a recesSioN bY a far larger mAGnItude than aNy oFf-setting redUctIon in dEmAnd FOr busIneSs worKing caPItal crEdit or lonG-tERm debt. aNd houseHOLdS are So extended that use OF cREdit barely declInes at AlL.

foR INstAncE, during the FiNanciAL crisis ANd gREAt RECession, the ratE of Federal bORroWing soArEd fROm $161 billIon in fY 2007 TO $1.4 trIllion in FY 2009. IN cumUlative teRms, FedERal debt OUtstandIng on tHe eVe oF the CRiSiS in sePTemBEr 2007 Was $5.994 TRilLion and bY tHe Time tHe woRST OF the RecEssiOn had Passed in SepteMbeR 2009 the FIguRe was $8.616 TrillIon.

SO oN the bAsis of HonesT fInance, Uncle Sam aLone Absorbed $2.622 tRilLiOn oF pRivatE SavingS duRinG that twO year peRIod. buT UNLiKe the theory, househoLd AND bUsiness bOrrowiNGs DiD Not go dowN.

IN faCt, thE DEbts oF non-FInAncial buSinessES (cOrPorate aNd NoncorPoRatE) acTuallY Rose From $9.845 trIllion in septeMBer 2007 to $10.387 trillion tWO years later, rePReSENtINg a gAin Of $542 billion.

LiKewiSE, totAl hoUSeHolD Debt bArely BuDGeD, Notwithstanding the mAsSive moRtgagE foreclosures Which occurRED During thIs peRIoD. to wit, household Debt oF $14.03 trillion iN septembeR 2007 had dIpped to $13.96 tRillion by sEPtember 2009, rEprEseNtiNg a TINy $65 Billion declinE (0.5%) DEcliNe.

in sum, US treAsury deManD foR fuNds RoSe by $2.62 trillIon durinG tHe 2007-2009 ReCeSsiOnary DEcline, buT pRivAtE hoUsehoLD and buSinesS demAnD aLSo rOse---by a nET oF $474 BIlliOn.

thEre wAs nO wEakenIng oF DemAnd for bOrrowings At aLL, meaNiNg The theoRy that private DeMand for borRoWinGs fallS DUring a reCessionary downturn is belIEd by the RelEvant FactS from the lAst Go-rounD.

WhATever mAy have Been tHe CasE BAck in THE KEynEsIan heydays OF The 1960S and 1970s Is No loNger relEvant. That's because tHE AmErican economy Is nOw enTOMbEd iN $72 TrILliOn OF puBLIc and private debT---upon which ThE DaIly turning OF thE eConomic Wheels vItallY Depend.

ACcordinglY, householDs Have NOT de-Levered sinCe the 2008-2009 criSis, with toTAl outSTaNding DebT now poStIng At a reCord $15.7 trILliOn and BusineSs Debt haS veriTaBly soareD by 58%
 or actual recession. Thereason wou ld be  re duc ed  dem and- --especially f r om b usiness and consumers- --for  c r edit . 
But t hat sho u ld n ' t h ap pe n i nt od ay'swor ld beca use govern men tborrowing ex p lo des during  arecession by  afar la rg erm agnit ude  than  any o f f-sett ing reduc ti o n in d e mand fo r bu sine ss working capita l  c r edit or long-t erm de bt .  A n d  ho use holds areso  exte n ded tha t  u s e ofc redit barelydeclines at all .

For  i nst a nce, d uring  t h e f inancial cr isis  and Grea t Rece s sion, t h e rateof Fed era l b orro w in gsoa re d  fr o m$16 1  bi llion in  F Y2007to $ 1 . 4 tril lio n in  FY 2 009. In cumul ati ve t e rms , Fed eraldebt  o utsta ndingon th eeve of the cris is i n Septemb er20 07wa s $5. 9 94 tri lli onand bythe tim e  th ew o r st  of the recessionha d pa ssed inSeptem b er  2 0 09 the f ig ure  was $ 8.616  tri l li on.

Soon the ba si s of ho ne st fin an ce,  Un cle S a m al one ab sorbed $ 2.622 trillion of pr i vate savingsd ur i n gt hattwo  year perio d. B u t un like th e t h eory,  hous eh o ld and business borrow in gs did  notgo down.

Infact, thed e b ts of no n-fi n an c ial businesses  (cor porate and noncorpo rate)  actuall y rose fr o m  $9.845tri lli oninS e pt ember 2007 to $ 10.3 87  trilli ontwo yea rslat er,  re pr esentinga gain o f$5 42  b ill ion.Likewise ,tot al  ho useho l d debt  bare ly b ud ge d , n otwiths t an d i ng t he  m assi vemo rtgag e fo r ecl osureswhich occ urr e d du ri ng  this p eriod. To wit ,householdde btof $14 . 0 3 trilli on in September 2007 ha d  dipped  to  $13. 96 t rillion b y S eptemb er2 009, r eprese nting  a  ti n y  $65b i ll ion  d ecline (0. 5 % ) d eclin e. 

In  sum, U S Treasury demandf orfunds rose by  $2 .62t r il lio n  d u rin gt he2 0 07-2009 recessi onary decl in e ,but privat e  ho us ehold a nd busi nessd emand a lso rose- --by a ne tof $ 4 7 4 b illion.

T here was  no weake n ing o f  d emand  fo r borr ow ing s atall, m e ani ng th e theo ry  thatpriva te  demandfor borrowings falls du ring a  rece ssi onary dow ntu r n i s beliedby t he relevan t f act s fro m t h e las t go - ro und . 

Wha teve r  may have be ent h ecase back i n t heKeyne sia n  heyda ys o f the 1960s and 1 9 70s is no long er r e l eva nt. That 's  because the A mer ic a n  economy  i s now entom bed in $ 72 trill ion of  publi c and p r i va t e debt ---u pon  which th e d ai l y turni ng  o f  the e cono mi c whee ls vit a llyd e pend.

According ly, h o u sehol d s h ave n ot  de-lev e redsince the2008-2009 c risis,  wit h tot al outs ta ndingdeb tnow postin g  at a rec ord $ 15.7 tr il lion  an d busi ness d ebt h as v er ita bly soare d by 58 %
 or_actual recession._The reason would be_reduced demand---especially_from_business and_consumers---for_credit.

But that shouldn't_happen in today's_world because government borrowing_explodes during a_recession_by a far larger magnitude than any off-setting reduction in demand for business working_capital_credit or_long-term_debt._And households are so extended_that use of credit barely_declines at_all.

For instance, during the financial crisis and Great_Recession,_the rate of_Federal borrowing soared from $161 billion in FY 2007_to $1.4 trillion in FY 2009._In cumulative terms,_Federal_debt_outstanding on the eve_of the crisis in September 2007_was $5.994 trillion and by the_time the worst of the recession had_passed in September 2009 the figure_was $8.616 trillion.

So on the_basis of_honest finance, Uncle Sam alone_absorbed $2.622 trillion_of private_savings during that_two year period. But unlike the_theory, household and_business borrowings did not go down.

In_fact,_the debts of_non-financial_businesses_(corporate and_noncorporate) actually rose_from_$9.845 trillion_in_September 2007 to $10.387 trillion two_years_later, representing a gain of $542 billion.

Likewise,_total household debt barely_budged,_notwithstanding the massive mortgage_foreclosures which occurred during this_period. To wit, household debt of_$14.03 trillion_in September_2007 had dipped to $13.96 trillion by September 2009, representing a_tiny $65 billion decline (0.5%) decline.

In_sum, US Treasury demand_for funds_rose_by $2.62 trillion_during_the 2007-2009_recessionary decline, but private household and business_demand also_rose---by a net of $474 billion.

There_was no weakening of_demand_for borrowings at all, meaning the_theory that private demand for borrowings_falls during a recessionary downturn_is_belied_by the relevant facts from_the last go-round.

Whatever may have been_the case back_in the Keynesian heydays of the 1960s_and_1970s is no longer relevant. That's_because_the American economy is now entombed_in_$72_trillion of public and private_debt---upon which the daily turning of_the economic wheels vitally depend.

Accordingly, households have not de-levered_since the 2008-2009_crisis, with total outstanding debt_now_posting_at a record $15.7 trillion and business debt has veritably_soared by_58%