Digging Out of Debt

Deleveraging, or reducing the amount you are borrowing, is the focus of this article. According to the research done, debt as a share of GDP has been increasing for the most part over the past ten years in the countries looked at. The US is one of those countries, with a ratio of just under 300 percent. Deleveraging is an attempt to reduce the amount of overall debt by reducing the amount borrowed. This will not be a fun process, as the article points out that, historically, output shrinks during the first 2 or 3 years of the deleveraging process.