Wages, household debt, and the fiscal cliff

Aca "One of the important consequences of the stagnation of wages in the United States has been the increasing reliance on debt as a source of funds for spending. Pivetti and Barba (2009) have argued that rising household indebtedness should be seen essentially as a reaction to stagnant real wages and the cutbacks in the welfare state. In other words, financialization has been the counterpart of enduring changes in income distribution. A point that has also been raised by Jamie Galbraith in his new book Inequality and Instability."