Additional implications of deleveraging. It's worth reemphasizing that lower debt service confers additional benefits on consumers not captured by traditional analysis:

Lower debt service frees up discretionary spending power that does not show up in the personal saving rate, because that rate excludes the cash flow benefits of lower principal repayment.

Lower debt service also makes consumers better able to service debt and more creditworthy. It's no coincidence that delinquencies on consumer loans peaked a year ago. That augurs a coming peak in loan chargeoffs; meanwhile, the record pace of such writedowns is accelerating the cleanup of both lender and consumer balance sheets. Perhaps that's why the Fed's July Senior Loan Officer Survey revealed that the highest proportion of banks in 16 years reported increased willingness to make consumer installment loans.