Why help to buy is no help at all to the economy | Jeffrey Frankel

State subsidies to promote home ownership is not always a good thing - it hikes public debt, cuts labour mobility and often boosts prices not ownership levels

At the end of the first quarter, according to the Federal Reserve Bank of New York, American consumer debt for the first time exceeded its previous peak (in dollars), reached in the third quarter of 2008, just as the global financial crisis erupted. Although car loans and student debt have been rising especially rapidly, housing debt remains more than two-thirds of the $12.7tn total.

As a share of income, household debt is nothing like the threat to the national economy that it was 10 years ago. But the new statistic is a reminder that American households don't save enough.

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