Credit where credit’s due

The American economy continues to defy doomsters. Here’s why.

Central bankers hiked rates at breakneck speed this year while doom-’n-gloomsters predicted a recession. But the American economy hasn’t stumbled. Despite being proven wrong so far, many folks with downbeat forecasts have stuck to their guns and reckon a recession will come. But they’re wrong. There’s no recession in sight.

The economy continues to expand, and real aggregate demand has accelerated. The year-on-year growth in real total spending rose to 2.6% last quarter, up from zero a year ago. The economy avoided recession because credit flowed. Banks lent, the government spent, and landlords borrowed.