If you look at debt service ratios (Fed data), they are close to historical lows:
But what if we adjust for low real earnings growth and lower savings rates (source data BEA)?
Well we find that the overall dynamic is much more constrained. Expenditure is bounded by much more than interest costs. Lower real growth in income per capital puts interest costs towards the upper half of the range, while adjusting for reductions in savings puts it towards the high area of the historical relationship. Indeed, we are still well above the constraints in evidence through 1980 towards the late 1990s, reinforcing the argument that overall debt levels are still above levels capable of delivering stable GDP growth.
After deducting real per capita growth in personal income, after deducting reductions in personal saving to the 3rd quarter 2013, the actual debt financing dynamics (which incorporate income growth and expenditure leeway by reference to savings rates) are by no means anywhere close to concluding an end to the balance sheet recession.