From this page
on 12 September 2015, this link
to a 24-page PDF: What Drives Consumer Debt Dynamics?
Twenty-four pages. Here's the opening paragraph:
Monetary policy influences household spending through various channels. For example, low interest rates support higher asset prices, increasing households’ wealth and producing more spending through the wealth effect. In addition, to the extent that previously acquired debts have floating interest rates or can be re-financed, low interest rates can reduce the burden of servicing those debts and free up cash flow for other spending. Low interest rates also tend to make new borrowing more attractive, which in turn can boost household spending.
You can challenge me on this, but I really don't have to read further. The authors of that paragraph think monetary policy drives consumer debt dynamics, end of story.
The old tax deduction for all consumer interest costs plays no role in their understanding. The present tax deduction for mortgage interest costs plays no role in their understanding. The present business and corporate income tax deduction for all business interest costs plays no role in their understanding. The entire business income tax structure -- which allows 100% tax deduction for all legitimate business expenses, but takes a cut of the income the business doesn't spend -- plays no role in their understanding. None of these incentives to borrow and to spend play any role in their understanding. Only the intermittent low interest rates bequeathed upon the economy by monetary policy play a role in their analysis.
I didn't read beyond that first paragraph, so I could be wrong. Want to show me I'm wrong about this? I'd be thrilled. But include a quote from the PDF and tell me what page you found it on.