"Reductions in the growth of private debt have been associated with every recession for the last 50 years."

It is one thing to say, as Auburn Parks says, that "every recession for the last 50 years" has been associated with "reduction in the growth of private debt".

But that is not the same as saying every reduction in the growth of private debt creates a recession (which is what Auburn seems to want to say).

I can accept implicitly that when there is a recession, the use of credit will fall. But I do not accept the assumption that whenever the use of credit falls, recession is certain.

And even if it is true that there was a recession every time credit-use fell in the last 50 years, it does not mean the economy has to work that way. All it means is that policy has set things up to work that way.

And if it is true that policy set things up to work that way, then the real problem is the thinking that underlies policy. The real problem is the flawed assumptions that underlie policy.

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To summarize the thought: Reduction in the growth of private debt need not be associated with recession. You want to keep that in mind when you think about the design of policy.