Free epub House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening AgainAuthor Atif Mian –

The Great American Recession resulted in the loss of eight million jobs betweenandMore than four million homes were lost to foreclosures Is it a coincidence that the United States witnessed a dramatic rise in household debt in the years before the recession that the total amount of debt for American households doubled betweenandtotrillion Definitely not Armed with clear and powerful evidence, Atif Mian and Amir Sufi reveal in House of Debt how the Great Recession and Great Depression, as well as the current economic malaise in Europe, were caused by a large run up in household debt followed by a significantly large drop in household spending Though the banking crisis captured the public s attention, Mian and Sufi argue strongly with actual data that current policy is too heavily biased toward protecting banks and creditors Increasing the flow of credit, they show, is disastrously counterproductive when the fundamental problem is too much debt As their research shows, excessive household debt leads to foreclosures, causing individuals to spend less and saveLess spending means less demand for goods, followed by declines in production and huge job losses How do we end such a cycle With a direct attack on debt, say Mian and Sufi More aggressive debt forgiveness after the crash helps, but as they illustrate, we can be rid of painful bubble and bust episodes only if the financial system moves away from its reliance on inflexible debt contracts As an example, they propose new mortgage contracts that are built on the principle of risk sharing, a concept that would have prevented the housing bubble from emerging in the first place Thoroughly grounded in compelling economic evidence, House of Debt offers convincing answers to some of the most important questions facing the modern economy today Why do severe recessions happen Could we have prevented the Great Recession and its consequences And what actions are needed to prevent such crises going forward House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again

About the Author: Atif Mian

Atif Mian is the Theodore A Wells 29 Professor of Economics at Princeton University and director of the Julis Rabinowitz Center for Public Policy and Finance

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