Graphs out of Context

Here is a graph:

It generally shows that bank lending in the United States is more volatile, but also recovered to pre-crisis levels of growth rather quickly, whereas bank lending is still contracting in Britain and much of Europe. This is loosely related to my previous post where I state my optimism about the U.S. economy. The negative effects of the debt crisis are lifting, making a return to "normal" rates of growth inevitable.

At the same time, an ignorant person could point to this showing that we are right back to making new debt. But debt is only half the story, there needs to be someone with credit to lend for there to be debt. Stronger bank lending shows that banks are more confident about being paid back, and able to raise the funds to lend in the first place. When times are bad banks and other large corporations sit on their money, making it useless. This is why in a recession some banks and corporations can become more profitable than they were before, because they hold on to their profits due to a risky investment/lending environment.