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US spending funded by credit

Increased US consumer spending built on diminishing household savings, mortgage equity withdrawls, and increasing credit.

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US spending funded by credit
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Incomes didn't keep up with productivity
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Financial innovation made credit cheaper and more widely available
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Many assets bought with cheap credit weren't worth price paid
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People encouraged to live beyond their means
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Response of Bush Administration to 2001 recession
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Partial repeal of Glass-Steagall act
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Investment banks incentivised to move into riskier activities
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Investment banks entirely outside the regulatory net
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Meddling with interest rates caused bubble
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Regulatory changes encouraged home ownership
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US policies to encourage home ownership promoted risky lending
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