House of Debt

Archival Summary & Scope

The Great American Recession, marked by millions of job losses and foreclosures, followed a dramatic doubling of U.S. household debt to $14 trillion by 2007. In *House of Debt*, economists Atif Mian and Amir Sufi present compelling evidence that major economic crises—from the Great Recession to the Great Depression and Europe's current woes—are fundamentally caused by excessive household debt leading to a sharp drop in spending. Challenging conventional wisdom, they argue that policies focused on banks and credit flow are counterproductive when the core problem is too much debt, not too little. Mian and Sufi trace a clear path from mounting debt to foreclosures, diminished demand, and widespread job losses, advocating for a direct attack on debt. They propose solutions like aggressive forgiveness and innovative, risk-sharing mortgage contracts to prevent future bubbles and forge a more stable economic future, all grounded in rigorous economic research.