Expert: Market growth outstripped economy

Stocks out in front of reality The surging markets of recent years created unrealistically high expectations for stock performance, according to U.S. News and World Report columnist Rick Newman, creating an economic climate in which consumers were subject to punishing levels of debt and creating a serious need for credit counseling services.

Newman writes that "our instinct during a market drop is to ask what happened to trigger it. But we might just as well ask whether that 83 percent run-up was warranted in the first place. Surely some of it was. Stocks sank to the lows of last March because investors were terrified of a full-blown depression, which obviously didn’t materialize, thanks to aggressive government intervention."

Newman also points out that, despite the slow resurgence of consumer spending since the recession, incomes have not kept pace with these increases, meaning that more and more U.S. consumers are going into debt in order to afford their purchases.

However, other experts have pointed out that the increase in consumer spending could be a sign of a more general economic recovery, spurring the income growth that is currently missing from financial indicators.