ECONOMISTS trying to explain the feeble pace of America’s recovery regularly blame deleveraging: the multi-year process of paying off the debts accumulated before the crisis. Yet for households, at any rate, deleveraging has stopped. Mortgage debt bottomed out in the middle of last year and is now rising again. Student and car loans are rising briskly. Only home-equity and consumer loans continue to shrivel. In absolute terms, household debt is rising again (see chart). Relative to household income, it peaked at 135% in 2007, fell to 109% at the end of 2012, and has roughly stabilised around that level. Banks, after years spent rebuilding capital and appeasing regulators, are ramping up lending. Total bank credit grew at a 7.5% annual rate in the second quarter, the fastest since 2007, with growth in most categories of loans. “There are lots of people out there, lots of banks out there with a lot of liquidity, competing for loans,” the chief financial officer of Wells Fargo, one of the country’s biggest lenders, recently told analysts. Competition to lend to car buyers has become so fierce that the Office of the Comptroller of the Currency, a regulator, has warned of deteriorating standards, with loans routinely exceeding 100% of the car’s value.

That borrowing is on the rise again should come as no surprise. Two studies, one by two economists, Carmen and Vincent Reinhart, and one by the McKinsey Global Institute, a think-tank within a consultancy, both found that prior episodes of post-crisis deleveraging lasted six to seven years on average—just like the present one.

In theory, deleveraging should end when debts are at a sustainable level, but that is difficult to measure. A recent working paper by three economists at the European Central Bank points out that the debt consumers can bear varies with interest rates, house prices, the rate of home-ownership, the share of the population aged 35-54, the deposit first-time house-buyers are required to make and the foreclosure rate. American debt exceeded the “equilibrium” level by some 25% of household income at the start of the recovery. Since then an improvement in many of these variables has raised the equilibrium even as debt has fallen, bringing the two into line.

The end of deleveraging has not stoked the economy as much as many hoped. In the first quarter of the year the economy shrank by 2.1% on an annualised basis. But there may just be a lag: growth is the second quarter was a much perkier 4%. Goldman Sachs projects that debt will rise faster than income over the next few years, keeping growth above 3%.

However, Richard Dobbs of McKinsey points out that although consumers are no longer cutting back, the public sector is only just beginning to tighten its belt and businesses never stopped adding to their debts. He reckons overall deleveraging, including firms and government, could go on for another four or five years.