[nsheth17]

The impact of this is going to become so obvious when interest rates start going up.

Let me explain. Ultimately, how much money the workforce is making matters to consumer spending. People may be ok not having a job, because they have some way to stay at their standard of living. But unless a bunch of them are sitting on family trusts, it also means they don't have a growing amount of money to spend.

Yet consumer spending has been growing steadily for the last 5 years. How can that be? The likely scenario is really cheap debt. The kind that disappears when interet rates aren't basically zero anymore.

We've shoved a lot of stuff under the "free money" carpet. When the Fed bumps up the interest rates, all those spiders are going to come out to play.

[edc117]

Just curious, what do you mean by 'free money'? Most loans I've seen over the last few years vary from anywhere between 2.5%+ (houses) to 17% (credit cards). I don't think anyone would think of those as 'free'.

I would think the interest rates going up would actually encourage people to save more.